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Twitter's Daily Active Users Finally Shows Some Solid Growth

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Twitter's Daily Active Users Finally Shows Some Solid Growth
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Expectations were high heading into Twitter Inc (NYSE: TWTR)'s first-quarter earnings report on Wednesday. Based on the stock's more than 10 percent move higher after the earnings report, it is safe to say that investors were happy with what they saw.

One of the more important metrics investors were looking for was a growth in daily active users. Analysts at MKM Partners said ahead of the report that anything less than a high-single-digit growth rate would be disappointing.

Double-Digit Growth

Twitter reported that its daily active users grew by 14 percent on a year-over-year basis — more than exceeding the high-single-digit figure some were expecting. In fact, Twitter's growth rate is the highest it has been since at least the first quarter of 2016.

Here is a comparison of Twitter's DAU growth rate per quarter:

  • Q1, 2016: +3 percent.
  • Q2, 2016: +5 percent.
  • Q3, 2016: +7 percent.
  • Q4, 2016: +11 percent.
  • Q1, 2017: +14 percent.

Twitter also highlighted growth in another key metric, monthly active users (MAU), which rose by 9 million from the prior quarter to 328 million.

"While we've made progress toward building a better, more cohesive user experience that is driving accelerating audience growth, there is still work to be done to translate that into revenue growth," the company said in its report. "In Q1, we continued to streamline and simplify our revenue products, communicate to advertisers the success we're seeing with accelerating audience growth, build new revenue product features, and reallocate resources to our highest revenue-generating priorities."

CNBC's "Squawk Alley" and "Squawk on the Street" anchor Carl Quintanilla pointed out that in addition to the user growth, the check-in rate for those users also increased.

At last check in Wednesday's pre-market session, shares of Twitter were up 10.5 percent at $16.20.

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Earnings Scheduled For April 26, 2017

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