Twitter Reports Earnings, Revenue And User Growth That Fell Below Expectations Of Analysts

Microblogging platform Twitter reported fourth-quarter earnings for 2021 and they fell below expectations of analysts on earnings, revenue and user growth.

The company reported earnings per share of 33 cents, a little below the 35 cents that analysts had envisioned, according to Refinitiv. Revenue reported for the quarter was $1.57 billion compared to the $1.58 billion estimated by analysts, according to Refinitiv. Twitter also reported monetizable daily active users (mDAUs) of 217 million and fell short of the 218.6 million that was the expectation of analysts, according to StreetAccount.

The company also made guidance for its next quarter available. It said it expects revenue to range between $1.17 billion to $1.27 in the quarter. The estimation of analysts for Twitter’s next quarter revenue lies at $1.26 billion, according to Refinitiv.

In the quarter, Twitter announced a share buyback program of $4 billion. According to what the company said, half of that will be an accelerated share repurchase with the remaining being repurchased over time.

Although the company fell short of the expectations of analysts in its user growth numbers, the company’s CFO Ned Segal reiterated the company stance of reaching 315 million mDAUs in the fourth quarter of 2023 and revenue of at least $7.5 billion in 2023.

The CFO revealed that the challenges that pushed revenue in the fourth quarter were as a result of a decline in the spending on advertising in the last few weeks of the quarter, adding that this has picked up since moving into the new quarter.

According to what Twitter’s newly-instated CEO Parag Agrawal said on an earnings call with analysts, the company strongly believes that it can still meet up to its 2023 goals irrespective of the challenges that it’s had along the way. He attributed this confidence to a significant increase in account sign-ups and reactivation of old accounts. The company said it’s seen 25% year-over-year growth in new account sign-ups or reactivation and a 35% year-over-year increase in daily sign-ups.

On the same call, CFO Ned Segal informed analysts that the surge it experienced in new signups and reactivation is driven partly by strategies such as encouraging users to sign in to their accounts when they visit Twitter from other platforms. According to him, the new users “look a lot like the people who have come to Twitter in the past, there’s just more of them”.

Twitter’s earnings report follows rivals like Facebook, which reported disappointing earnings and saw its market cap fall, and Snap which had impressive results for the quarter irrespective of the challenges that Apple’s privacy policy brought.

Twitter mentioned that it wasn’t affected so much by the privacy changes in the quarter. It said in its shareholder letter that the impact of Apple’s privacy changes “remained modest” in the fourth quarter adding that “Although retooling our revenue products in light of Apple’s privacy-related iOS changes took additional time, energy, and resources in 2020 and 2021, we believe that our product improvements have helped reduce the impact on Twitter”.

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