Twitter Earnings Beat In Q4, Misses Subscriber Expectations, Expense To Increase 25%

The fourth quarter of 2020 has been a recuperating one for big online advertisers and technological firms like Snap (SNAP), Alphabet (GOOGL), and Facebook (FB). The rise in the demand for e-commerce and a season of longer than usual online shopping has been a catalyst to digital advertising growth.

Twitter shares went up in the late trading Tuesday. The company’s fourth quarter revenue and figure for adjusted profit beat Wall Street’s forecast. Twitter stock went up 3.3% in afterhours trading.

Twitter’s CEO, Jack Dorsey said 2020 was an extraordinary year for Twitter and the company is prouder than ever to serve the public especially in times as unprecedented as this. The company reported an average figure of 192 million users which was a 27 percent increase from a year ago. This comparison was based on a measure the company uses and it is called monetizable daily active users, or mDAU. Wall Street’s expectation for this was 193.5 million. In other words, Twitter’s earning beat Wall Street’s expectation but its growth in users fell short.

To compare figures, the expected earnings per share was 31 cents against 38 cents. The company made a revenue of $1.29 billion dollars beating the expectation of $1.19. Monetizable daily active users (mDAUs) fell short of the expectation of 193.5 million users with a figure of 192 million.

Twitter expects revenue to grow geometrically while expenses grow arithmetically in 2021. This expectation is with the assumption that the pandemic would continue to get better and takes account of the sweeping change to come from Apple’s perspective privacy changes to iOS 14.

The company however, warns that it forsees a headcount growth of more than 20 percent in 2021 and an increase in expenses by 25 percent.

Jack Dorsey made it known that 80 percent of Twitter user base is outside of the United States of America.  He called the company a company that provides a global service and that the company is not limited by and dependent on news and politics that drives Twitter. Twitter CEO Jack Dorsey, added that over 6,000 topics are followed on Twitter and that these topics drive interest and growth. Dorsey said he believes that being able to follow topics and interests is extremely critical and so important in the time we live in.

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