February 10, 2021
By Elizabeth Culliford and Munsif Vengattil
(Reuters) – Twitter Inc forecasts a strong start to 2021 on Tuesday, surpassing Wall Street’s quarterly sales and profit targets, following social media peers as advertising spending recovers from a solid state. ..
The solid beat, backed by improvements in advertising products, has led investors to overlook the dull forecasts of user growth. Twitter expects it to slow to the low double digits this year, boosted by the pandemic turmoil.
Total revenue was a record $ 1.29 billion, up 28% year-on-year. The company’s stake rose nearly 3% in extended trading, adding to the 11% stake increase so far this year.
Social media companies said costs would increase by more than 25% in 2021, but predicted that total revenue would grow faster than costs.
Social media companies are in the limelight in the global debate about what is allowed on the site – a recent refusal to follow the Indian government’s directive to block accounts related to farmers’ protests. The riots in the Capitol in January following the ban on former President Donald Trump.
At a financial results briefing with analysts, CEO Jack Dorsey downplayed the impact of the controversial January account closure.
“We are clearly a much larger platform than one topic or one account. 80% of our audience is outside the United States,” he said.
Hari Srinivasan, senior research analyst at Neuberger Berman, said investors missed Twitter user growth failures due to other positive factors during the quarter, including increased advertising revenue, profitability and better-than-expected revenue guidance. I see that.
Twitter announced in the fourth quarter that it had 192 million average monetizable daily active users (mDAU). This is a term for the number of users per day that can display ads. This is a 26% year-on-year increase. Analysts expected 196.5 million, according to Refinitiv’s IBES data. According to Twitter, user growth could drop to the “low double digits” from the second quarter.
According to Twitter, user growth was driven by product improvements and more global conversations from events such as the COVID-19 pandemic and the US presidential election. Temporary changes to reduce false information about US elections had a slight negative impact on the growth of users around the world, he said.
Advertising revenue was $ 1.15 billion, up 31% from the year-ago quarter and above analysts’ estimates.
The company is building tools to help advertisers increase product sales and fine-tune their ads to interested users. This allows Twitter to make more money from advertisers.
Twitter acquired newsletter startup Revue last month. He also said he recently launched a disappearing tweet called “Fleet” and released a beta test of “Spaces,” an audio chat room feature similar to the voice-based app Clubhouse, in late fourth quarter.
Dorsey told analysts in a conference call that the company was working on a subscription but didn’t expect meaningful revenue until next year.
Net income increased from $ 118.8 million (15 cents per share) in the year-ago quarter to $ 222.1 million (27 cents per share). Excluding items, Twitter earned 38 cents per share, above an estimated 31 cents.
Twitter’s quarterly costs and expenses were $ 1.04 billion, an increase of 21% over the previous year. He said he expects to increase costs and costs, with plans to increase staff by more than 20%, especially in engineering, products, design and research.
According to Twitter, total revenue for the quarter is expected to be between $ 940 million and $ 1.04 billion.
Deploying Apple Inc’s planned privacy changes to iOS systems is expected to have a “moderate impact.”
(Reported by Elizabeth Califord of New York, Mansif Bengattir of Bangalore, Sheila Dan of Dallas, edited by Lisa Shoemaker)
Twitter investors look back on warnings about slowing user growth and spikes in ad sales
Source link Twitter investors look back on warnings about slowing user growth and spikes in ad sales