Twitter Posts Q4 Revenue of $1.01bln, mDAU Hits 152mln

Twitter Posts Q4 Revenue of $1.01bln, mDAU Hits 152mln
February 7, 2020

 

Social media platform provider Twitter, Inc. (Nasdaq: TWTR) reported fiscal 2019 fourth-quarter earnings that missed analyst projections but surpassed revenue and active user forecasts. Aided by strong US advertising, the company also posted over $1 billion in quarterly revenue for the first time. Furthermore, Twitter posted a y-o-y increase in monetizable daily active usage (mDAU) of 21% for 4Q 2019. Following the quarterly earnings report, the stock ended yesterday’s trading session at $38.41, reflecting an increase of $5.02 or 15.03% from the prior close.

The San Francisco, California-based company reported revenue of $1.01 billion, up 11% from $908.84 billion in the comparable quarter last year. Wall Street analysts anticipated revenue of $996.74 million for the reported period.

For the quarter ended December 31st, 2019, Twitter posted Q4 2019 net income was $118.773 million, or $0.15 per share, down from $255.303 million, or $0.33 a share, in the year-ago period.

Excluding charges, 4Q 2019 non-GAAP net income declined to $195.61 million, or $0.25 per share, from $244.14 million, or $0.31 a share, in the prior-year period. On average, analysts polled by Thomson Reuters anticipated the company to post earnings per share of $0.29 for 4Q 2019.

Segment-wise,

  • Advertising revenue was $885 million, up 12% from $791 million on a y-o-y basis.
  • Data licensing and other revenue increased 5% y-o-y to $123 million.
  • International revenue was $416 million, an increase of 3% from $403 million.
  • International advertising revenue was $375 million, up 3% y-o-y.

Average monetizable daily active users (mDAU) in the fourth quarter were 152 million, an increase from 126 million last year and 145 million in the previous quarter. Analysts had anticipated the company to report mDAU of 147.50 million.

Likewise, the average US mDAU was 31 million, compared to 27 million in the year-ago period and 30 million in the earlier quarter. Twitter stated that it recorded the quickest quarterly mDAU growth of 21% in the recent quarter. Additionally, mDAU posted a new historical high in the fourth quarter of 2019.

The company intends to achieve revenue sustainability in 2020 while facilitating anyone in any corner of the world to work for Twitter. To achieve these objectives, Twitter plans to set up a new data center and increase employee count by at least 20% this year, particularly in product, engineering, design, and research. The company currently has 4,800 employees.

Twitter stated that total ad engagements increased 29% in the quarter, led by enhanced clickthrough rates (CTR) and rise in impressions due to growth in users. Cost per engagement (CPE) declined 13%, primarily due to a move to video ad structure, which usually has lower CPEs as per the company.

Looking forward, Twitter stated that it anticipates Q1 revenue in the range of between $825 million and $885 million, versus Thomson Reuters consensus estimate of $872.64 million.

The company also anticipates stock-based compensation expenses for FY 2020 to decline to a range of $425 million-$475 million. Capital expenditures are anticipated to decrease to $775 million-$825 million.

The company’s executives cautioned shareholders that the headwinds which affected during the fourth-quarter would “continue to weigh on the overall performance of our advertising business in the near term,” according to CFO Ned Segal. The CFO also stated that the impact would be seen in 2020 as well.

Twitter further stated that it anticipates completing its advertisement server rebuild in 1H2020 and has made advancements in its future version of MAP, which is also anticipated to be rolled out this year. In its letter to shareholders, the company stated that it has “shipped remediations designed to help address the third-party measurement issues we encountered in Q3.”

Twitter CEO Jack Dorsey revealed that the company intends to hire across the globe. “Our concentration in San Francisco is not serving us any longer and we will strive to be a far more distributed workforce which we will use to improve our execution.”

Dorsey is trying to reduce his reliance on San Francisco and addressed his previously announced plans to move to Africa for up to six months while running the business.

Regarding work management, Dorsey said, “I don’t fear any slowness as we work to distribute our workforce now, and I do think we have to build a company that’s not entirely dependent on San Francisco. As we look forward we’re reaching a talent pool that expects a lot more remote work … we should be building our company around that. I haven’t made any plans just yet for this year but I do expect that I will travel.”

Even though the company missed earnings forecasts, the upbeat quarterly revenue and better-than-anticipated mDAU is expected to keep the stock bullish in the near-term.

The historical price chart indicates that the stock has closed above its 50-day moving average. Additionally, the stochastic oscillator is also rising towards the bullish zone. Therefore, we are anticipating the stock to move up in the short-term.

twt - technical analysis - 7th Feb 2020

Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.

Ian Maguire

Ian Maguire

Ian is our resident contributor to the latest going ons in the cryptomarket, keeping up to date with the latest icos and coins


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