Twitter beats on earnings but user growth is still a concern

10 February, 2019, 00:14 | Author: Billie Castillo
  • Twitter app in use

Expected total revenue for the first quarter of 2019 is between $715 million and $775 million for the first quarter of 2019.

Analysts polled by FactSet were expecting earnings of 25 cents per share and revenue of US$867 million.

Twitter may get a lot more attention in the media than Snapchat, but it has a lot fewer daily users, at least at first glance.

By contrast, Twitter officials said, competitors' user metrics often include eyeballs to which they can't show ads.

The growth rate was also 9% in 3Q and had jumped 12% in 4Q of 2017, the company said.

In August, Twitter reported an unexpected drop in second-quarter monthly active users. Contributing to Twitter's monthly user count woes, the company has cracked down on bots and purged hundreds of fake accounts from Iran, Russia, and Venezuela that were believed to be targeting the 2018 midterm elections. The company said it would no longer report the number of monthly active users after 1Q. Twitter says its measurement is more stringent and accurate than those used by rivals as it only counts users it knows are actually exposed to ads. However, the company disclosed in a recent report that it found operations to mislead users on the platform that were potentially connected to sources in Iran, Venezuela, and Russian Federation. Based on GAAP (generally accepted accounting principles), Twitter made $255 million in the quarter, up from $91 million reported during the same quarter a year ago.

The company in 2018 marked its first full year of profitability under generally accepted accounted principles, according to Bloomberg. Twitter claimed 321 million monthly users, down 9 million, or more than 2 percent from the same time a year ago.

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The results prove "our long-term strategy is working", Chief Executive Officer Jack Dorsey said in the statement.

"We have to make Twitter more conversational", he said.

Twitter is anticipating total revenue for Q1 2019 to be between US$715 million and US$775 million, with an operating income of US$5 million to US$35 million - far below the $74.9 million income, it posted during the same period a year ago.

Those higher costs could eat into Twitter's future earnings, some analysts said.

Twitter defines monetizable daily active usage or users (mDAU) as Twitter users who logged in or were otherwise authenticated and accessed Twitter on any given day through or Twitter applications that are able to show ads.
"And for the most part, businesses looking to advertise want to be on Facebook and Google". Its share of total worldwide digital ad spending is estimated to drop to 0.8% in 2019 from 0.9% in 2018, according to EMarketer.

Starting in the current quarter, Twitter said it would stop disclosing the number of monthly active users, a statistic internet companies have routinely reported over the past decade.



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