Twitter is sliding despite beating Wall Street expectations

  • Twitter’s stock was sliding early Thursday, despite its fourth-quarter earnings beating Wall Street expectations.
  • Revenue was up 24% year-on-year to $US909 million, b ut monthly active users fell by 9 million to 321 million.
  • Twitter is phasing out the monthly-active-user metric and says it will switch to what it calls “monetizable daily active users.” It has 126 million of these.

Twitter reported its fourth-quarter earnings before the opening bell on Thursday.

It’s generally been a happy earnings season for Silicon Valley, with the likes of Facebook and Snap topping Wall Street expectations.

Twitter was under pressure to do the same, and it beat or matched analyst forecasts on some key indicators.

  • Revenue: $US909 million. Analysts were looking for $US869.5 million. Sales were up 24% on $US717 million in the final three months of 2017.
  • Earnings per share: 31 cents, compared with 25 cents expected by Wall Street.
  • Monthly active users: 321 million – down 9 million year-on-year but matching the forecast 321 million.
  • Q1 revenue guidance: Between $US715 million and $US775 million. Wall Street is looking for $US762.43 million.

Despite the performance, Twitter’s stock slid nearly 8% in premarket trading. As of 8 a.m. in New York, it was down 5.6%.

Twitter’s daily active users

Twitter revealed its total daily active users for the first time: 126 million. Twitter plans to switch to this user number metric (what it calls “monetizable daily active users”) exclusively after the first quarter of 2019, and it will no longer report monthly active users.

“Monetizable DAU are Twitter users who log in and access Twitter on any given day through or our Twitter applications that are able to show ads,” Twitter said.

That 126 million figure is 60 million fewer daily users than Snapchat, which could be part of the reason Wall Street was spooked by Twitter’s fourth-quarter earnings. But Twitter said the number was not comparable to disclosures from other firms, which it said “share a more expansive metric that includes people who are not seeing ads.”

Analysts have long been frustrated by Twitters refusal to reveal its daily active users. It has only previously revealed growth percentages. “Their excuse that they won’t disclose is lame,”Wedbush Securities’ Michael Pachter said on Twitter last year. “If they can’t tell us the numbers, why brag about growth?”

Twitter CEO Jack Dorsey said 2018 was “proof that our long-term strategy is working.”

“Our efforts to improve health have delivered important results, and new product features like a single switch to move between latest and most relevant Tweets have been embraced by the people who use Twitter,” he said.

Twitter’s costs and expenses totaled $US2.6 billion in Q4, an increase of 8% year-over-year. It expects these costs to rise 20% in 2019 as it prioritises “health, conversation, revenue product and sales, and platform.”

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