Twitter Stock Rises as Job Listing Points to Subscription Plans

Twitter is looking to hire a software engineer to help the company develop a subscription platform that could be used by multiple teams.
Author:
Updated:
Original:

A job listing that suggests Twitter  (TWTR) - Get Report plans to support subscription services has led Twitter’s stock to rise more than 7% in Wednesday trading.

“We are building a subscription platform, one that can be reused by other teams in the future. This is a first for Twitter!,” reads the job listing, which is for a “senior full-stack software engineer.” The hired engineer will join a web engineering team known as Gryphon that’s said to be “closely collaborating” with Twitter’s payments team, as well as with its Twitter.com team.

There aren’t any additional details about what kind of subscription services Twitter plans to support. One possibility is that -- following the rapid growth of platforms such as Patreon and Substack -- Twitter is working on a platform that would let its users monetize their accounts via subscription services.

In addition, Twitter has toyed over the years with the idea of creating a subscription service for power users. In 2017, the company sent out a survey to select users that suggested it’s thinking about offering a more advanced, paid version of its TweetDeck dashboard that would aim to “help marketers, journalists, professionals, and others in our community find out what is happening in the world quicker, to gain more insights, and see the broadest range of what people are saying on Twitter.”

A subscription platform would open up a new revenue stream for Twitter at a time when the company is seeing healthy user growth, but is also struggling to grow its top line thanks to both ad product execution issues and the COVID-19 pandemic’s impact on ad spend.

In Q1, Twitter’s monetizable daily active users (mDAUs - daily users capable of seeing Twitter ads) rose 24% annually to 166 million. However, revenue rose just 3% to $808 million, with ad revenue rising less than 1% to $682 million. Moreover, ad revenue was said to be down 27% annually from March 11 to March 31, and the company suggested on its April 30 earnings call that its April performance was similar.

Along with ad sales headwinds, pressure from activist investor Elliott Management to boost top-line growth could be motivating Twitter to explore new revenue streams.

Elliott, which has about a 4% stake in Twitter, was reported in late February to seek the ouster of CEO Jack Dorsey. But it later reached a standstill agreement with Twitter (in partnership with PE firm Silver Lake) that lasts until a month before board nominations are due prior to Twitter’s 2021 annual meeting. Among other things, the deal added three directors to Twitter’s board and featured a commitment by Twitter to both grow its mDAUs by more than 20% in 2020 and accelerate revenue growth beyond 2020.