Twitter Shares Drop as Company Reveals Disappointing User Numbers

Twitter Shares Drop as Company Reveals Disappointing User Numbers

Twitter reported a better than expected 24 per cent increase in fourth-quarter revenue on Thursday, helped by growth in its video advertising business. However, the company's revenue beat estimates in the fourth quarter.

For the fourth quarter, Twitter booked revenue of $909 million versus a market expectation of $868.1 million, a figure also significantly up on the $758 million in revenue booked in the third quarter. Dorsey said this financial quarter was Twitter's most successful ever. $791 million of that figure comes from advertising revenue, split $425 million in the United States compared to $366 internationally - while data licensing making up the other $117 million.

Twitter reported quarterly profit, excluding some items, of 31 cents per share. That is the lowest number Twitter has had in almost two years. The short-messaging platform said it posted a $255m profit in the final three months of 2018, compared with $91m a year earlier, AFP reported.

Jack Dorsey, co-founder and chief executive officer of Twitter Inc.

We now have a better idea of just how many people use Twitter's cursed microblogging service on a daily basis.

Twitter's share price fell more than 8% in early Wall Street trading as record fourth-quarter revenues and the milestone of achieving its first full year of profitability failed to allay investors' concerns over a drop in user numbers and a weak revenue forecast.

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"Our [monetizable daily active users] are not comparable to current disclosures from other companies, many of whom share a more expansive metric that includes people who are not seeing ads", Twitter said in a letter to investors.

Twitter's MAUs declined 9% year over year to 321 million. Advertisers will now be able to view the number of "monetizable" Daily Active Users (mDAU), which stands in solid opposition with Facebook's recent announcement that it will be merging its metrics across its "Family" of apps including Whatsapp and Instagram, and no longer reporting on individual Facebook user figures. Analysts surveyed by Zacks had expected revenue of US$762.5 million, which is higher than the midpoint of the company's outlook. Analysts are expecting about $765m, on average.

Twitter's operating costs are expected to surge by 20 percent year on year, a large increase from analysts projections of 12 percent.

It expects capital expenditures to be between $550 million and $600 million, well above analysts' average estimate of $415 million for 2019. "And for the most part, businesses looking to advertise want to be on Facebook and Google". The company brought in $3 billion in revenue for all of 2018, marking a 25 percent increase year-over-year.

Enberg said the growth in daily users, however, means that people are still "highly engaged" on Twitter, which advertisers will take as a positive sign.

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