Twitter warns user growth will slow as it beats sales and profit targets
Covid and US presidential election drive traffic on site in fourth quarter
Social media group Twitter posted 27 per cent user growth on Tuesday, missing Wall Street estimates. Photograph: Matt Rourke/AP Photo
Social media group Twitter posted 27 per cent user growth on Tuesday, missing Wall Street estimates, and warned this rate would slow in the upcoming quarters as a boost from the pandemic fizzles.
The company, which beat quarterly sales and profit estimates, said expenses would rise by a quarter or more in 2021 but projected that total revenue would grow faster than costs.
In the fourth quarter, Twitter said it had 192 million average monetisable daily active users – its term for the number of daily users who can view ads. Analysts were expecting 196.5 million.
Twitter said user growth was driven by product improvements and more global conversation from events like the Covid-19 pandemic and the US election. Some temporary changes to reduce misinformation around the election had a small negative impact on global user growth, it said.
The social media company has been in the spotlight amid global debates over what is allowed on the site – from its ban on former US president Donald Trump to its recent refusal to comply with an Indian government directive to block accounts linked to the farmers’ protest.
In a letter to shareholders, Twitter said the significant pandemic-related surge in users last year created challenges for future gains.
Twitter’s advertising business benefitted from new ad formats and improved targeting, Chief Financial Officer Ned Segal said in the earnings release.
Total revenue came in at a record $1.29 billion, an increase of 28 per cent year over year. Ad revenue was $1.15 billion, up 31 per cent from the same period a year ago.
Analysts on average were expecting revenue of $1.19 billion, with ad sales totalling $1.05 billion.
Net income rose to $222.1 million, or 27 US cents per share, from $118.8 million, or 15 cents per share a year earlier. Excluding exceptional items, Twitter earned 38 cents per share, beating estimates of 31 cents. – Reuters