Will Twitter’s Costs and Expenses Continue to Rise in 2019?
By Sophia NicholsonApr. 24 2019, Published 7:50 a.m. ET
Twitter’s rising expenses
Twitter’s (TWTR) adjusted costs and expenses rose 18% YoY (year-over-year) to $604.9 million in the first quarter of 2019 as the company made efforts to fight the fake news menace and suspended many doubtful accounts for violating its anti-spam rules.
Twitter continues to expect its operating expenses to increase ~20% YoY in 2019, as it plans to boost its investments in health, conversations, and products as well as in its platform as a whole.
Adjusted EBITDA
The company posted sluggish growth in adjusted EBITDA in the first quarter due to higher operating expenses. Its adjusted EBITDA of $290.6 million was 19.1% higher than in the previous year’s quarter but 26.8% lower than in the previous quarter. Its adjusted margin in the quarter was 36.9%.
Efforts to keep the platform safe
Twitter is removing fake accounts and making other efforts to safeguard its platform and bring back users’ confidence. Posts on Twitter and Facebook (FB) played a part in influencing the outcome of the 2016 US presidential election.
Twitter removes abusive tweets and tweets sharing personal information multiple times a week. These tweets are detected by its machine-learning models. Twitter’s CEO, Jack Dorsey, is also considering removing Like counts from tweets, and he’s testing new features to hide replies to declutter conversations.
Facebook is also investing billions of dollars in fixing content issues, but it’s continuing to struggle with issues of privacy and the release of users’ data. Last week, the company revealed that millions of Instagram users’ passwords had been leaked instead of the hundreds that had been reported earlier. The company then uploaded the email contacts of nearly 1.5 million new users without their permission. Facebook was also blamed for livestreaming the recent terrorist attack in New Zealand, which was also shared on Instagram, Alphabet’s (GOOGL) YouTube, and Twitter.
