Twitter CFO on earnings and product innovation
Twitter CFO Ned Segal discusses the company’s most recent quarterly results and outlook, product innovation and how the social media platform is thinking about former President Donald Trump rejoining the platform.
Video Transcript
BRIAN SOZZI: Twitter shares are moving higher as two big name investors showed strong support for the company after a sharp earnings related sell-off last week. Elliott Management reportedly scooped up $200 million worth of Twitter stock amid the sell-off last week. Meanwhile, noted investor Cathie Wood over at ARK about $71 million of Twitter stock after the price declined. Let's dive into the company's future with Twitter CFO Ned Segal. Ned, good to see you here this morning. A source told me this morning that Elliott is back in the market buying Twitter stock. What do you think the Street more broadly got wrong about your last earnings report?
NED SEGAL: Thanks for having me, Brian. It's great to be here. We are 60 days into a three-year plan to double our revenue to $7 and 1/2 billion, to continue to grow our DAU, annualize at 20% to 315 million. We've made great progress this quarter with 32% ads growth, 20% DAU growth. We rolled out business profiles. The Super Bowl went really well. There are lots of great things that are happening around Twitter. And we're just going to have to keep pushing ahead in the coming quarters and demonstrate progress towards these goals that we've set.
BRIAN SOZZI: And you laid out that big revenue goal to double your revenues by 2023, your February-- late February investor day. So even though there was some slowdown in the monthly MDAU metric in the first quarter, you still think you can hit that doubling.
NED SEGAL: There's no change to our goals for 2023. And we don't expect a straight line in terms of how we get there, partly because there's this big group that joined us last year around the start of COVID-19. We had over 30 million MDAU that we added on a year over year basis in Q1. Also, in the United States, there was lots of focus all year around the lead-up to and the aftermath of the US presidential election.
So what we shared back in February-- and there's no changes to it now-- is that we expect low double digit growth in Q2, Q3, and Q4, with a low point in Q2. But when we step back and we look at our shipping cadence, we look at all the things we're doing to make Twitter better for the people who come to it every day, the top of funnel continues to be healthy in terms of people who come to Twitter, who haven't been on it for a month or more. And we feel really good about the path we're on right now.
JULIE HYMAN: Hey, Ned, it's Julie here. I want to ask about sort of product versus news events. In other words, it has seemed historically that you guys increase engagement around what's happening in the outside world, not necessarily what you guys are offering on Twitter itself. And so, when you look to things like fleets or other new initiatives like spaces, is that a question of driving new users? Is it a question of driving engagement? What's the goal? And what-- do you actually have a specific goal in mind with those?
NED SEGAL: So we really think about two different ways to add to our audience. The first is the news and events and topics that drive people to our service. It could be a sporting event. It could be a discussion about the Super League. It could be cricket in India. Or it could be that your favorite artist dropped a new album. And those things drive people to our service to talk and learn from others and be a part of a conversation, whether it's through images or text, or now a live audio chat room. So the first way is through events and topics that bring people to Twitter.
The second is we have to continue to work hard to make it easier for people to find what they're looking for and to share their thoughts when they come to Twitter. That means adding audio chat rooms, adding audio tweets, adding ways for people to organize Twitter around communities, around lists, around the topic. So they don't have to find the accounts that they want to follow. We'll will do the hard work for them. It's the combination of these two, those events and the product, that will help us get to 315 million by the end of 2023.
JULIE HYMAN: Of course, one of the favorite artists, so to speak, on the part of some Twitter users, was President Trump, who is no longer on the platform, at least not right now. We're expecting to hear from a Facebook committee tomorrow morning about whether he's going to be allowed to go back on that platform. How are you guys thinking about him on Twitter?
NED SEGAL: Well, there's no changes to anything we shared in the past around the former president's account. When you step back and think about our policies, we want to work hard to be consistent, to be transparent so that people know exactly what to expect from us. We don't have an oversight board like that. Our team is accountable for the decisions that we make. And there's no changes to anything we've talked about in the past.
JULIE HYMAN: I want to ask sort of a bigger question then related to that. Because as a frequent Twitter user myself, it seems like a lot of users do have sort of this hate-- like, love-hate relationship with it, right, and that there is a good amount of negativity on the site, leaving disinformation aside for a moment, related to the former president's account. Are you guys sort of trying to innovate ways to make that better? I mean you can't innovate human nature, I suppose, past a certain point. But are there ways to make it less negative?
NED SEGAL: Well, we work really hard to help people both understand our rules and to show up in a way that they can be proud of, not just in that moment, but over time. I'll give you a few examples. One is we have what are called conversation controls so that you can decide who can reply to your tweet, if it's your followers, if it's nobody at all, or if it's anybody. That's something we rolled out last year.
A second is to give people a nudge when they are about to retweet something that they haven't clicked through and read, to help make sure that articles aren't being sent around before people have the chance to think and reflect about if that's something that they want to be sharing and to make sure it's something that they've read. A third is to gently nudge somebody if they're about to say something that includes words that might be inflammatory to others.
And so these are all things that we've tested and learned around over time and that will continue to evolve, with the intent being that we want to help people show up in a way that they can be proud. And we want to help people show up in a way that makes the conversation on Twitter as constructive as possible, even when people are talking about topics that might be controversial. Because a lot of what Twitter is, is allowing people to hear all sides of an argument, whether it's about sports or politics.
BRIAN SOZZI: Ned, Twitter is out this morning, launching a new feature called Scroll. And on the blog post discussing what Scroll is, you mentioned subscriptions. Is the coming any closer to launching a subscription service?
NED SEGAL: Brian, there are lots of great ways that we want to help people through subscription over time. And you'll see things from us in the coming quarters here. Scroll is a terrific team and product that we just acquired this morning, which will be a nice addition to a subscription offering from us over time, which will remove ads from long form content and allow people to read newsletters and magazines without seeing ads because they paid for them through a subscription.
Ultimately, we want two kinds of subscriptions. We want those that put money in the hands of content creators, but we're facilitating a transaction. And then we also want those where people subscribe for premium features that we create and provide to them, where the value accrues to Twitter. If we can do both of those well in the coming quarters, we think there's a lot that we can provide for the content creators and for the people who use our service.
BRIAN SOZZI: So you think the service will launch before year end?
NED SEGAL: You'll see subscription offerings from us over the course of this year. We're going to test and learn. And as we test and learn, we'll roll out more broadly. I wouldn't expect meaningful revenue from these things this year. But I do think that you'll get to see things in the product, which will continue to grow and evolve over time in the subscription area this year.
BRIAN SOZZI: Looking forward to giving that stuff a try. We'll leave it there. Twitter CFO Ned Segal, good to see you this morning.
