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Twitter Q4 mDAUs Up 21%

February 06, 2020

Twitter reported financial results for its fourth quarter and fiscal year 2019. The firm's EPS came in at 25 cents per share, but 29 cents per share in earnings was expected. As to revenue, Twiiter reported $1.01 billion with only $996.7 million expected. The closely watch Monetizable Daily Active Users (mDAUs) metric was 152 million with 147.5 million total expected.

"2019 was a great year for Twitter. Our work to increase relevance and ease of use delivered 21% mDAU growth in Q4, with more than half of the 26 million mDAU added in 2019 directly driven by product improvements," said Jack Dorsey, Twitter's CEO. "Entering 2020, we are building on our momentum -- learning faster, prioritizing better, shipping more and hiring remarkable talent. All of which put us in a stronger position as we address the challenges and opportunities ahead."

"We reached a new milestone in Q4 with quarterly revenue in excess of $1 billion, reflecting steady progress on revenue product and solid performance across most major geographies, with particular strength in US advertising," said Ned Segal, Twitter's CFO. "We continue to see tremendous opportunity to get the whole world to use Twitter and provide a more personalized experience across both organic and promoted content, delivering increasing value for both consumers and advertisers."

Guidance

For Q1:

Total revenue to be between $825 million and $885 million

Wall Street was looking for $873 million.

Operating income to be between $0 million and $30 million

For FY 2020:

Stock-based compensation expense to be between $425 million and $475 million

Capital expenditures to be between $775 million and $825 million

Fiscal Year 2019 Operational and Financial Highlights 

  • 2019 revenue was $3.46 billion, an increase of 14% year-over-year. On a constant currency basis, revenue grew 15% year-over-year. 
  • 2019 costs and expenses totaled $3.09 billion, an increase of 19% year-over-year. This resulted in operating income of $366 million and 11% operating margin. 
  • 2019 net income was $1.47 billion, representing a net margin of 42% and diluted EPS of $1.87. This compares to 2018 net income of $1.21 billion, representing a net margin of 40% and diluted EPS of $1.56.
    • In 2019, excluding the income tax benefit from the establishment of deferred tax assets related to intra-entity transfers of intangible assets of $1.21 billion, we generated adjusted net income of $259 million, adjusted net margin of 7%, and adjusted diluted EPS of $0.33
    • In 2018, excluding the income tax benefit from the release of deferred tax assets valuation allowance of $845 million, adjusted net income was $360 million, with adjusted net margin of 12% and adjusted diluted EPS of $0.47

Fourth Quarter 2019 Operational and Financial Highlights 

  • Q4 revenue totaled $1.01 billion, an increase of 11% year-over-year.
    • Advertising revenue totaled $885 million, an increase of 12% year-over-year.
      • Total ad engagements increased 29% year-over-year.
      • Cost per engagement (CPE) decreased 13% year-over-year.
    • Data licensing and other revenue totaled $123 million, an increase of 5% year-over-year.
    • US revenue totaled $591 million, an increase of 17% year-over-year.
    • International revenue totaled $416 million, an increase of 3% year-over-year.
  • Q4 costs and expenses totaled $854 million, an increase of 22% year-over-year. This resulted in operating income of $153 million and 15% operating margin.
  • Q4 net income was $119 million, representing a net margin of 12% and diluted EPS of $0.15. This compares to net income of $255 million, a net margin of 28% and diluted EPS of $0.33 in the same period of the previous year. Excluding the income tax benefit from the release of deferred tax assets valuation allowance in the same period last year, adjusted net income was $135 million, with adjusted net margin of 15% and adjusted diluted EPS of $0.17
  • Average monetizable daily active users (mDAU) were 152 million for Q4, compared to 126 million in the same period of the previous year and compared to 145 million in the previous quarter.
    • Average US mDAU were 31 million for Q4, compared to 27 million in the same period of the previous year and compared to 30 million in the previous quarter.
    • Average international mDAU were 121 million for Q4, compared to 99 million in the same period of the previous year and compared to 115 million in the previous quarter.

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