Twitter Soars 20% After Smashing Expectations, Despite Decline In US Users, Ad Revenue

Twitter shares have stormed out of the gate, following today's Q4 earnings which smashed expectations, with revenue of $731.6 million, up 2% Y/Y, beating the highest estimate ($709MM) and certainly the consensus of $686.4MM, while EPS of 19 cents was also above the 14 cent estimate.

Twitter was quick to point out its reversal in revenue noting that "total revenue in Q4 was $732 million, reflecting year-over-year growth of 2%, as compared to a decline of 4% in Q3 2017, a decline of 5% in Q2 2017, and a decline of 8% in Q1 2017."

Commenting on the result, Twitter said that "Q4 was a strong finish to the year with total revenue increasing 2% year-over-year, and owned-and-operated (O&O) advertising revenue increasing 7% year-over-year, reflecting better-than-expected growth across all major products and geographies."

Also of note, EBITDA of $308.2MM was over 20% higher than the $241.6MM expected.

The company's outlook was also impressive, with Twitter predicting that in Q1, Adjusted EBITDA would be between $185 million and $205 million, vs est of $188.3MM, on adjusted EBITDA margin to be between 33% and 34%. For the full year, Twitter expects capital expenditures to be between $375 million and $450 million.

And yet, not all was well, for one the number of MAUs failed to grow sequentially (up 4% Y/Y), and at 330MM, missed expectations of 333MM. More ominous, and an echo of recent events at Facebook, Twitter's US MAUs declined by 1 million.

Also a concern: US ad revenue tumbled by 10% to $342MM from $382MM a year earlier.

Not helping is the sharp drop in ad engagements, which at 75% were down by more than half from the year ago period.

This is how the company explained the drop in US revenue:

Total US revenue was $406 million, down 8% year-over-year. Total international revenue was $326 million, increasing 17% year-over-year. We saw continued regional strength in Asia Pacific and improvement in some EMEA markets. Japan grew 34% year-over-year and contributed $106 million, or 15% of total revenue.

For now, however, Twitter shareholders like what they see - which perhaps is the better than expected outlook, and have sent the stock soaring over 20% on what appears to be an aggressive short squeeze.

Twitter shares are back at the highest since July 2015

Source: Twitter

Comments

giovanni_f Arnold Feb 8, 2018 7:52 AM Permalink

my guess is that Twitter won't be around by 2025. Gone. As fast as it rose so furious will it go down.

Sometime between now and 2025 a termination event (new competitor, user behaviour changes, internet out of fashion as people are fed up being grandfathered, new communities with emphasis on non-digital communication) will finish the power of these new masters of the universe for good.

In reply to by Arnold

BabaLooey New_Meat Feb 8, 2018 8:19 AM Permalink

Proud that I am NOT a  Twitter Twat,....never "Tweeted" fuckall.............

Know why Trump uses it...and have gone on record in that he needs to TIGHTEN up on the Tweets....

(like...blowharding on the casino......Donald)

But the usage of Twitter by the masses...socially.....

Has been ASININE on so many levels......

Ergo Twitter (the way it's used right now)..IS asinine

In reply to by New_Meat

Pool Shark New_Meat Feb 8, 2018 8:22 AM Permalink

So...

It IPO'd around $42 in 2014. Even with today's 20% pre-market jump, it's sitting at $32 (down from its all-time high around $70).

Even if they made $0.19/share every quarter, that's only $0.76/share per year;... a return of just 2.3% per year.

BUT, you've lost a quarter of your investment due to falling share price!

 

I can get a higher yield on a 5-Year CD that's fully-insured and skip all the risk of this bubble market.

Why would anybody want to buy Twatter?

In reply to by New_Meat

D.T.Barnum Arnold Feb 8, 2018 7:59 AM Permalink

"When do they shadow ban The Donald?"

I mean, the whitehouse has a website, right?  Maybe he can just post things on there?  Seems like a good solution.  Maybe he can even make a forum where you sign up for a profile.  I mean, how much is spent on worthless aides, security, and filet minogne dinners on the airforce one? No money to run a webpage?  Wow.  Mr.  President, call me. You might want to hire me as a consultant. 

In reply to by Arnold

P.K.Snosage Feb 8, 2018 7:45 AM Permalink

In the main driven by the "show popular tweet" button that most people do not actually know about.

 

Effectively a way to drive revenue through forcing people to have their tweets promoted; hence the massive reduction that most ordinary bods are seeing in retweets over the past twelve months - your tweets are basically not appearing in peoples' timelines unless they are "popular." 

Whoa Dammit Feb 8, 2018 7:50 AM Permalink

Algos will never let these pseudo-corporations, who make nothing and sell nothing (but spy on everyone a lot), do anything but increase in value. Algos are like perpetual motion machines of our doom.

StephenHopkins Feb 8, 2018 7:59 AM Permalink

DeepState is propping it up- federal reserve bank basement is a private stock exchange that manages the phony economy. Bring them down! Hang Jack Dorsey from a lamppost with the clintons 

Telemakhos Feb 8, 2018 8:12 AM Permalink

Fuck EBITDA and all non-GAAP handwaving. What was the actual net profit or loss using real accounting practices? I’m seeing $91MM elsewhere. If that’s true, congrats to Twitter for finally turning a quarterly profit for the first time in its long, cash-burning history.

action jackson 911 Sanity Bear Feb 8, 2018 9:02 AM Permalink

Twatter is a front company run by the CIA or NSA or some other US alphabet group. Maybe Soros has shares there, that fucked-up ass-hole gimmigrant and rapefugee lover :)) Twatter was a long time ago the best trolling place on Earth, now it is just a spying and censorship engine. There are only moron fucked-up libtards, feminists, muzzies and sand-niggers who are using it. And of course the magic nigro Obummer and Hitlery too :)) But hey, we at least know who will have to execute after the SHTF :)) And guess what, it will be fun to execute all those useful idiot leftist scumbags from Twatter, Goolag, Microshit and so on :)) It really will be a lot of hell of a fun, fuckers !!! :)) Way to go, Mr. President Trump, you are the last greatest troll ever on Twatter, here we go again :))

In reply to by Sanity Bear

surf@jm Feb 8, 2018 9:05 AM Permalink

That's if you believe their numbers.......

And pay no attention to them borrowing money to buy their own stock, and also being a CIA construct......