{"id":18416,"date":"2020-05-02T00:31:36","date_gmt":"2020-05-02T00:31:36","guid":{"rendered":"https:\/\/rbsitsoftwaresolution.com\/blog\/twitter-q1-sales-up-3-to-808m-as-it-swings-to-a-loss-on-covid-19-mdaus-hit-record-166m.html"},"modified":"2020-05-02T00:31:36","modified_gmt":"2020-05-02T00:31:36","slug":"twitter-q1-sales-up-3-to-808m-as-it-swings-to-a-loss-on-covid-19-mdaus-hit-record-166m","status":"publish","type":"post","link":"https:\/\/www.rbsitsoftwaresolution.in\/blog\/twitter-q1-sales-up-3-to-808m-as-it-swings-to-a-loss-on-covid-19-mdaus-hit-record-166m.html","title":{"rendered":"Twitter Q1: sales up 3% to $808M as it swings to a loss on COVID-19, mDAUS hit record 166M"},"content":{"rendered":"

Despite traffic for many online properties being at an all-time high, advertising has fallen off a cliff because of the downturn in consumer activity outside the home and the wider economic pressures resulting from the COVID-19 pandemic. And today,\u00a0Twitter<\/a> reported quarterly earnings<\/a> that bore this trend out.<\/p>\n

The ad-based\u00a0social networking and media company said that in Q1 it made\u00a0$808 million in revenues, actually up 3% on a year ago, with<\/span>\u00a0monetizable daily active users (Twitter\u2019s own metric for measuring its audience) grew 24% to 166 million, an all-time high, adding\u00a014 million average mDAUs since Q4 (152 million) and 32 million since Q1 of last year (134 million). <\/span><\/p>\n

However, o<\/span>perating income for the quarter swung to a loss of $7 million, working out to a net margin of -1% and diluted EPS of -$0.01.<\/span><\/p>\n

Analysts had expected<\/a>, on average, to see $775.96 million in revenues on earnings per share of $0.10, so Twitter beat on sales, and missed on earnings. (Note: Twitter\u2019s <\/a> analyst consensus, provided to journalists, was a little different and painted a more positive picture: it noted average EPS expectations were -$0.02 on sales of $776 million, with expectations of mDAUs at 164 million. Twitter says that its figures are based on non-GAAP numbers, but even on GAAP EPS Twitter\u2019s actual EPS is a beat on consensus of -$0.02.)<\/p>\n

Times have really changed whichever way you look at it. In the same quarter a year ago<\/a>, Twitter reported sales of $787 million, up 18%; net income of $191 million; and diluted EPS of $0.37.<\/p>\n

\u201cIn this difficult time, Twitter\u2019s purpose is proving more vital than ever,\u201d said CEO Jack Dorsey in a statement. \u201cWe are helping the world stay informed, and providing a unique way for people to come together to help or simply entertain and remind one another of our connections. We\u2019ve delivered our strongest ever year over year mDAU growth. Public conversation can help the world learn faster, solve common problems, and realize we\u2019re all in this together. Our task now is to make sure we retain that connection over the long term with the many people new to Twitter.\u201d<\/p>\n

The company said that the quarter played out in \u201ctwo distinct periods\u201d, January through early March, which largely performed as expected, it said, and eearly March through the end of the quarter, \u201cwhen the pandemic became global.\u201d<\/p>\n

None of this should come as a surprise. Twitter itself announced more than a month ago<\/a> that it was removing its own financial guidance because of the instability of its business due to COVID-19 \u2014 noting only that it would be lower than expected:<\/p>\n

\u201cWhile the near-term financial impact of this pandemic is rapidly evolving and difficult to measure, based on current visibility, the company expects Q1 revenue to be down slightly on a year-over-year basis,\u201d it wrote at the time. \u201cTwitter also expects to incur a GAAP operating loss, as reduced expenses resulting from COVID-19 disruption are unlikely to fully offset the revenue impact of the pandemic in Q1.\u201d<\/p>\n

It did point out one bright spot, which is that it is picking up many more users because of increased \u201cconversation about COVID-19 as well as ongoing product improvements.\u201d Then, it said that quarter-to-date average total mDAU was around 164 million, up 23% from 134 million in Q1 2019 and up 8% from 152 million in Q4 2019.<\/p>\n

Generally, Twitter\u2019s fortunes this quarter are in line with results from Alphabet\/Google<\/a> and Facebook<\/a>, which also reported earnings this week that reflect the impact of reduced advertising revenues due to fallout from the the public health crisis.<\/p>\n

But even without the impact of COVID-19 on Twitter\u2019s primary business of advertising, the company had been facing a tough time leading into the quarter. Like eBay<\/a>, Twitter has been the subject of activist investor activity pushing for leadership and operational changes to improve growth and profitability. (Coincidentally, the same activist investor, Elliott, has been behind both efforts.) Unlike eBay, however, Twitter has managed to keep its CEO in place \u2014 co-founder Jack Dorsey \u2014 but has had to concede board seats as part of a wider financing package and strategy to refocus the business<\/a>. There may be questions on the call today to see if all of that has been put on ice given how other factors are now in play.<\/p>\n

One outcome from the deal it had cut with investors was to provide more actionable plans that translated to growth and profit, and on that front at least Twitter is playing ball.<\/p>\n

It notes that it has \u201cshifted resources and priorities to increase focus on our revenue products, particularly performance ads beginning with MAP [mobile application promotion ads], with the goal of accelerating our long-term roadmap.\u201d This has included an\u00a0<\/span>ad server rebuild that should be finished by the end of Q2 to implement microservices architecture for more efficiency and to make it easier to make changes on the fly. It\u2019s also implementing\u00a0direct response advertising, also with the aim of adding new features that it can charge advertisers for.<\/p>\n

\u201cWe have increased our focus and the relative prioritization of our revenue products, and will shift and add product and engineering resources as practical to increase our pace of execution on this critical work,\u201d it noted in the\u00a0<\/span>earnings\u00a0letter.<\/span><\/p>\n

Breaking out some specific numbers, advertising accounted for the lion\u2019s share of sales at $682 million, with data licensing making up much of the remainder. US revenues were\u00a0$468 million, up 8% year-over-year, while international was at\u00a0<\/span>$339 million, down 4%.<\/p>\n

No layoffs announced (not yet) but as with others like Spotify, Twitter is putting a hold on hiring. The company had committed to increase headcount this year by at least 20% (alongside its CEO relocating to Africa temporarily and many other optimistic plans) but this is now being slowed down \u2014 to what extent, it did not say, but it did note that 2020 total expense growth would now be \u201cconsiderably less\u201d than the 20% it had projected.<\/p>\n

More to come.<\/p>\n

Article source: http:\/\/feedproxy.google.com\/~r\/techcrunch\/social\/~3\/yEHYzFx7_sI\/<\/p>","protected":false},"excerpt":{"rendered":"

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