Twitter Tops Forecasts with mDAUs
April 30, 2020
Twitter reported financial results
for its first quarter 2020. The firm had earnings per share (EPS) of 11
cents with revenue of $808 million. Twitter's monetizable daily active
users (mDAUs) came in at 166 million.
The Street was looking for Twitter to
per share of 10 cents on revenue of $776 million with mDAUs at 164
“In this difficult time, Twitter’s
purpose is proving more vital than ever. We are helping the world stay
providing a unique way for people to come together to help or simply
entertain and remind one another of our
connections. We’ve delivered our strongest ever year over year mDAU
growth,” said Jack Dorsey, Twitter’s CEO.
“Public conversation can help the world learn faster, solve common
problems, and realize we’re 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.”
“Revenue was $808 million in Q1, up
3% year over year, reflecting a strong start to the quarter that was
by widespread economic disruption related to COVID-19 in March,” said
Ned Segal, Twitter’s CFO. “We are shifting resources and priorities to
increase focus on our revenue products and reduce expense growth,
ensuring our resources are allocated against our most important work.
Revenue product has been elevated to our top company priority, as the
current environment validates and creates even more urgency around
delivering more direct response ad formats.”
First Quarter 2020
Operational and Financial Highlights
Q1 revenue totaled
$808(1) million, an
increase of 3% year-over-year.
Q1 costs and
expenses totaled $815 million, an
increase of 18% year-over-year. This resulted in an operating
loss of $7 million and -1%
operating margin, compared to operating income of
$94 million or 12% in the same
period of the previous year.
Q1 net loss was
$8 million, representing a net
margin of -1% and diluted EPS of ($0.01).
This compares to net income of $191
million, a net margin of 24% and diluted EPS of
$0.25 in the same period of the
previous year. Excluding a $124 million
tax benefit related to the establishment of a deferred tax asset
from an intra-entity transfer of an intangible asset, adjusted
net income was $66(2) million,
with adjusted net margin of 8% and adjusted diluted EPS of
$0.09 in the same period last
daily active users (mDAU) were 166 million for Q1, compared to
134(3) million in the same period of the previous
year and compared to 152 million in the previous quarter.
(1) Please note that the sum
of advertising revenue and data licensing and other
revenue does not add up to total revenue in Q1'20 due to
rounding. The sum of US revenue and international
revenue does not add up to total revenue in Q1'20, also
due to rounding.
(2) Please note that Q1'19 net
income less our Q1'19 tax benefit related to the
establishment of a deferred tax asset from an
intra-entity transfer of an intangible asset does not
equal adjusted net income due to rounding.
(3) Please note that the sum
of US mDAU and International mDAU does not add up to
total mDAU in Q1'19 due to rounding.
Given the unprecedented
uncertainty and rapidly shifting market conditions of the current
business environment, we are not providing quarterly revenue or
operating income guidance for Q2. Although we are also not updating
our previously withdrawn full-year outlook for expense and headcount
growth, capital expenditures, or stock-based compensation at this
time, please note the following:
expenditures: While we remain committed to building out a new
data center, recent developments may impact capex spend in
full-year 2020. Current IT supply chain constraints are likely
to affect timing of the buildout and elevated near-term capacity
needs are driving increased spend on our existing
compensation expense is closely tied to headcount, timing of
grants, and vesting. We have diminished visibility for full-year
2020 expenses with reductions in our hiring ramp underway, but
we do expect SBC to grow sequentially in Q2 by 25% or more.