Twitter Earnings Not Enough, Despite Strong Beat

Twitter Earnings Not Enough, Despite Strong Beat

Twitter Earnings Not Enough, Despite Strong Beat

Twitter has reported only the second profit in the social network's history after an unexpected leap in advertising revenue, capping a recent turnaround after years of disappointment. According to Stifel analyst John Egbert, this implies "a deceleration to low double-digit y/y total revenue growth by 4Q". Overall, Q1 2018 was Twitter's second-straight profitable quarter, with the social platform raking in $665 million in revenue during the first three months of the year.

"We are not that far away from global becoming more than half of revenue at Twitter", Chief Financial Officer Ned Segal told analysts on a conference call, highlighting strength in Japan, UK, Brazil and the Middle East. It reported adjusted earnings of 16 cents per share, above the consensus of 12 cents. While Twitter once struggled to keep up with lofty expectations for user growth, investors now no longer expect the company to be a growth rocket and instead see it as one that may cut its spending to become more profitable. Almost all of that growth is coming from overseas: Twitter had 69 million users in the United States, unchanged from a year earlier. Internationally, MAUs grew to 267 million users from 262 million.

Twitter beat monthly active user (MAU) projections, hitting 336 million at a growth rate of 6% year over year.

Yuval Ben-Itzhak, CEO of Socialbakers, said: "Twitter's Q1 results show that it is still an attractive platform for advertisers and for users".

Twitter CFO Ned Segal said Twitter has had strong interest in in-stream video ads as well as incremental revenue growth in its new ad formats Video Website Cards and Video App Cards. 243,000 shares were sold by Jabre Capital Partners Sa as the company's stock rose 14.76% while stock markets declined.

Shares reversed pre-market gains and fell 2.4 percent to close at $29.75 following the results. Twitter said daily users grew 10% from a year ago, though the company doesn't disclose the base number of people.

The US still generates more sales than the rest of the world, though Japan is becoming increasingly important.

"Twitter's Q1 earnings remain strong following a solid Q4 performance in which the business turned a profit for the very first time". It also provides promoted services and products, such as promoted tweets, promoted accounts, and promoted trends, which enable its advertisers to promote their brands, products, and services.

Separately, Twitter is also updating its Privacy Policy and Terms of Service to make them easier to understand, as well reflect ongoing changes to its platform.

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