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Twitter beats expectations as users grow and streamlining continues

Twitter is trying to become a healthier place.

Twitter logo on a smartphone screen

Twitter's first-quarter earnings have given the company reason to sing a happy song.

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Twitter is soaring high as users flock to the social network amid its efforts to crack down on abusive content and make the platform a more pleasant place to be.

On Tuesday, Twitter said that monthly active users increased to 330 million in the first quarter from 321 million users in the fourth quarter. From now on, though, Twitter will stop reporting monthly active users, which had been its benchmark for engagement.

Instead, the company will report daily active users. Roughly 134 million users logged on to Twitter every day, an increase of 8 million compared to the 126 million the company reported in the fourth quarter. Twitter said its daily active users aren't comparable to those of other social networks because it only counts users who can view ads.

Revenue rose 18% year over year to $787 million. That topped the $775.69 million that analysts surveyed by Thomson Reuters expected. Twitter reported adjusted earnings of 37 cents per share, above the 15 cents that analysts expected.

Twitter beat expectations across the board, suggesting that some of the major changes it's been making to the platform -- tackling hate speech, making conversations easier to follow and introducing new features to improve user experience -- may be paying off. For many Twitter users, the changes are long overdue.

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In previous quarters, Twitter saw a drop in monthly active users and partly attributed the decline to its efforts to crack down on spam and fake accounts. During the first quarter, Twitter estimated, fake or spam accounts represented fewer than 5% of its monthly and daily active users.

Twitter CEO and co-founder Jack Dorsey said that the company's top priority has been improving the "health" of  the platform, a move that could attract more users and advertisers. Twitter, which has lagged behind other social networks like Facebook, is using technology to flag abusive tweets before a user reports it.

"What this means is that we're taking a bunch of the burden away from the victims of abuse and harassment on our service," Dorsey said during a call with analysts on Tuesday.

In early trading Tuesday, Twitter shares were up more than 13% to around $39.05.

Promoting 'healthy' conversations

If you find Twitter confusing to use, you aren't alone.

Last month, the social network began letting some users test new features designed to make it easier to follow the sometimes helter-skelter conversations. The lack of organization was illustrated in February, when Twitter CEO Jack Dorsey was interviewed by tweet. Walt Mossberg, a veteran tech journalist, called it "a living example of how Twitter is a chaotic hellpit."

The features included adding color to replies and indenting replies to help users follow along.

Dorsey said that most of the people testing the new Twitter features prefer it over what's currently on the site and app.

"It's showing that we're headed in the right direction," Dorsey said Tuesday. "But we still have some work to do before we we feel confident that we should put it in production."

Twitter's efforts to improve usability came as the company continues to crack down on hate speech and harassment. Like other social networks, such as Facebook and YouTube, Twitter struggled to remove copies of the New Zealand mosque shooting videos.

The social network has been called a toxic place, especially for women. Last year, a study by Amnesty International and Element AI found that female journalists and politicians received "abusive" or "problematic" tweets every 30 seconds on average.

In April, Twitter said it was using technology to flag abusive tweets before a user reports them. About 38% of content that violates Twitter's rules was flagged by the company, compared to none during the same period last year, according to the company. Twitter said it introduced a new reporting process, and since then, the company has removed 2.5 times more tweets that share private information.

There are more possible changes coming to Twitter. The company said it plans to add a notice if a tweet violates the company's rules but stays up because it's in the public interest, a change that could impact President Donald Trump. In June, Twitter plans to launch a feature that lets people hide individual replies to tweets.

Dorsey said the company is also working on ways to make it easier to follow interests and events. Currently, Twitter users have to do a "ton of work" to find accounts that are related to their interests.

"The goal there ultimately," Dorsey said. "would be for more people to participate in conversations around that interest."

Originally published April 23 at 4:23 a.m. PT
Update at 6:25 a.m. PT: Adds remarks from conference call.
Update at 7:09 a.m PT: Adds change to stock price in early trading.