Shares of Twitter sank 11 percent in after-hours trading on Thursday as they offered easy second-quarter earnings guidance, warned of rising costs and expenses, and said consumer growth could slow as growth observed during the second quarter the coronavirus pandemic.
The social media company publishes revenue and number of users mostly in line with analysts’ estimates in stark contrast to better-performing digital advertising companies such as Facebook and Alphabet.
He said he expected second-quarter revenue of between $ 980 million (approximately 7,250 kroner) and $ 1.08 billion (approximately 7,990 kroner), lower than Wall Street’s average estimates of $ 1.06 billion (approximately 7,850 kroner). crore), according to IBES data from Refinitiv. He also said stock-based compensation for new hires would be higher than expected this year.
Twitter says it wants to restart after years of product stagnation, announcing in February bold goals to expand its consumer base, accelerate new consumer features and double its revenue by 2023.
“The explosive growth that Twitter experienced during the pandemic has slowed quite rapidly since the eventful 2020, in which the microblogging site benefited greatly from the US election and the growth caused by the pandemic,” said Harris Anwar, senior. analyst at Investing.com.
Advertising revenue for the first quarter was $ 899 million (approximately 6,650 kroner), up 32 percent from the same period last year, exceeding analysts’ estimates of $ 890 million (approximately 6,590 kroner). Total revenue for the quarter was $ 1.04 billion (approximately Rs 7,700), up 28 percent from the previous year and slightly higher than the forecast of $ 1.03 billion (approximately Rs 7,620).
Google and Facebook, the first two largest digital advertising platforms, blew past earnings expectations in their first quarters. Advertisers believe that both have more ad formats and better targeting capabilities than Twitter.
Asked during a conference call with analysts why Twitter did not see the same growth growth as other digital advertising companies, CFO Ned Segal said that a company that relies more on brand advertising usually sees a slow start after the holidays, which is getting worse. of the real -events of the world such as the Capitol Revolt on January 6.
Twitter reported 199 million active users a day, up 20 percent from a year earlier than analysts forecast 200 million, according to FactSet.
The San Francisco-based company reiterated its warning that the growth of its monetized daily active users (mDAU) – its term for daily users who can view ads – could reach “low double digits” in the coming quarters, possibly hitting a low point in Q2.
Segal said Twitter wants to keep the users it added during COVID-19 a pandemic, so “while the economies are opening up, as the events they watched from their couches are now available in person … they keep coming to Twitter.”
“Too early” to say
In February, Twitter pledged to double its annual revenue to $ 7.5 billion (approximately $ 55,500) in 2023 from $ 3.7 billion (approximately $ 27,380) in 2020. In response to criticism summarized by the CEO Jack Dorsey this year as “we are slow, we are not innovative and we are not trusted”, the company said recently detached Revue platform newsletter and podcast company Breaker and annoying many new products.
The company is also testing a live audio feature Spaces to compete with Club house. It also works on ways for users to find topics that interest them, and has spurred new ways for creators to make money on the site, from tips to “super follows,” where fans can pay for exclusive content.
Twitter, which banned the former president of the United States Donald Trump following the Capitol Revolt on January 6, it remains the focus of its content policies and algorithmic systems. Both Dorsey and the head of US public policy on Twitter have appeared before Congress in recent weeks as lawmakers consider changes to the accountability of social media platforms.
Twitter said it expects total revenue to grow faster than spending this year, assuming the coronavirus is not such an important factor and sees a “modest impact” from Apple’s changes.
But in his forecast, he said equity-based compensation costs for this year would be $ 600 million (approximately 4,440 kroner), compared to his previous guidance of between $ 525 million (approximately 3,890 kroner) to $ 575 million ( approximately Rs 4,260 crore) as the company increases hiring. He estimates that capital expenditures will be $ 900 million (approximately 6,660 kroner) and $ 950 million (approximately 7,040 kroner) for the full year.
Twitter said it expects staff numbers, as well as total costs and expenses, to increase by at least 25 percent in 2021 on an annual basis.
© Thomson Reuters 2021