Commentary

Twitter Hits 192M Users, Dorsey Shrugs Off Trump Removal

Twitter beat Wall Street forecasts on revenue and profit in the fourth quarter, but missed user growth expectations.

Daily active users (DAUs) reached 192 million — a 27% year-over-year gain, up by 5 million from Q3, and up 26.3% compared to a year ago — the company reported on Wednesday.

However, that missed Wall Street’s expectation of 193.5 million, per StreetAccount.

Total revenue was up 28% YoY, to $1.29 billion, versus a Refinitiv forecast of $1.19 billion.

Advertising revenue leapt 31%, to $1.15 billion.

One contributor: revenue from its Mobile Application Promotion (MAP) direct response ad business leapt 50% YoY in the quarter. A rebuilt MAP is now being launched, which should further expand its addressable market and customer base, Twitter said.

Operating income was $252 million, up from $153 million YoY, and adjusted earnings per share were 38 cents, versus a Refinitiv forecast of 31 cents.

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Twitter expects only a “modest” impact from Apple’s coming privacy features on iOS 14.

It forecast Q1 2021 revenue at between $940 million and $1.04 billion, versus analysts’ expected average of $965 million.

While the company projects a 25%-plus increase in overall expenses for 2021 (including a 20%-plus increase in headcount), it expects revenue growth to outpace the expenses.

While not specifically mentioning Twitter’s permanent ban of Donald J. Trump’s 88-million-follower account as of Jan. 8, following his incitement of the Capitol insurrection, CEO Jack Dorsey seemed to signal that it won’t create any serious challenge for the platform.

“We are a platform that’s obviously much larger than any one topic, or any one account,” Dorsey said during a call with analysts, adding that “80% of our audience is outside the United States.”

Twitter is not just dependent on news and politics, he stressed, noting that the platform’s growth is driven in large part by the more than 6,000 topics that users can follow.

Twitter also reported that despite “the unusual circumstances” in January, growth in average DAUs exceeded the platform’s historical average for the past four years, and forecast about 20% YoY DAU growth for the full first quarter.

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