Growth in Twitter users was below expectations for the third quarter in a row, and posted lukewarm revenue forecasts despite a larger increase in digital advertising spending during the pandemic.
The San Francisco-based social media group said its first-quarter revenue increased 28% year-on-year to $ 1.04 billion, slightly ahead of analyst expectations of $ 1.03 billion. dollars.
Despite a “strong adoption” of its new advertising system, Twitter said it expected revenue for the second quarter of this year to be between $ 980 million and $ 1.08 billion, at the end of the day. lower end of consensus estimates of $ 1.05 billion.
Twitter shares fell more than 10% in after-hours trading, beating the trend of Facebook and Google, which soared on bumper quarterly profits earlier this week.
the number of logged in users to whom Twitter served advertising in the first quarter of 2021
When asked why Twitter failed to keep pace with its digital media rivals in the first quarter, CFO Ned Segal said the company is relying more on marketers to launch marketing campaigns. brand advertising, which is usually scheduled after the Christmas holidays. This was likely “exacerbated” by the fact that brands were more conservative in their spending due to the Capitol riots and the inauguration of President Joe Biden, he added.
Twitter also said that Monetizable Daily Active Users (mDaus) – a local metric that counts the number of logged-in users that the platform advertises to – increased 20% year-over-year to reach 199 million, also less than the 200 million expected by analysts. . The quarterly results are the first for the company since the network permanently banned one of its largest users, former US President Donald Trump, in January.
In a letter to shareholders, Twitter reiterated a warning that the increase in user growth linked to the pandemic – as people used the devices more during lockdowns – was easing and would likely result in slower growth rates and “Double digit” over the next few quarters, especially the current one.
Total costs and expenses are expected to increase by at least 25% year over year in 2021, increasing as the year progresses, he added.
Twitter has invested in several upcoming features in an attempt to boost engagement and diversify its revenue streams beyond advertising, due to concerns over slow product innovation.
“We continue to expect total revenue to grow faster than expenses in 2021, assuming the global pandemic continues to improve and we see a modest impact from rolling out the changes associated with iOS 14.5. “, Twitter said, referring to Apple’s upcoming privacy changes to its iPhone operating system, which will make tracking ads more difficult.
“The speed will depend on a variety of factors, including our execution on our direct response roadmap and macroeconomic factors.”
Net income was $ 61 million, compared to a net loss of $ 8 million in the same quarter last year.
Twitter shares hit record highs in early March, after the company set its very first long-term revenue and user goals – boldly planning to ‘double’ its annual revenue to $ 3.7 billion. dollars in 2020 to $ 7.5 billion in 2023 and reach $ 315 million. mDaus at this point.