Twitter Inc. (NYSE:TWTR) in it’s 10-Q filing with SEC made a revision of its active users. Twitter had disclosed earlier that as much as 14% of its active users were using third-party apps, which however has been later revised down to 11%. The revision was made after the company found out that the previous figure included the number of users of third-party apps actually included users who accessed the platform through apps and services owned by Twitter. Nevertheless, the growing number of third-party apps users essentially means a reduction in the number of people who can view ads that continue to form a key revenue stream for the company.
But why this revision might be important to investors? The answer is easy, it is related to the number of people that view the adds placed by the company on their platform. With third-party apps, fewer people can see those adds, therefore, following the revision, Twitter Inc. (NYSE:TWTR) has basically told investors that 89% of their users can see the adds, instead of the previous 86%.
Twitter Inc. (NYSE:TWTR) in the filing has also revealed that the third-party applications have the ability, to automatically contact its servers, for regular updates without any form of user action involved. The move essentially prompts the giant social, medical company server’s to count the third party applications as active users essentially reflecting an increase in the company’s monthly active users whenever contact occurs.
Twitter Inc. (NYSE:TWTR) reported last month that its active users grew by 24% on a year-over year basis and 6% sequentially, a number that could considerably reduce with the recent revelations. Twitters active users growth in the second quarter was attributed to the World Cup event which brought millions of people together through the sharing of action and events on the microblogging site.
The filing also shows that out of those 11%, as much as 8.5% of all monthly active users used third-party apps that had the ability to contact and auto pull users feeds automatically.