The social media company also said stock based compensation
for new hires would be more than expected this year.
Shares of Twitter fell 8.7% to $59.30 in trading after the
bell.
Twitter says it wants to reset after years of product
stagnation, announcing in February bold goals to expand its user base, speed up
new features for users, and double its revenue by 2023.
Ad revenue for the first quarter were $899 million, up 32%
from the same period a year ago and beating analyst estimates of $890 million,
according to IBES data from Refinitiv. Total revenue for the quarter was $1.04
billion, up 28% year-over-year and slightly higher than estimates of $1.03
billion.
The San Francisco-based company reported 199 million daily
active users, up 20% year-over-year, compared to analysts' estimates of 200
million, according to FactSet data.
Twitter repeated its warning that growth of its monetizable
daily active users (mDAU) - its term for daily users who can view ads - could
reach "low double digits" in the next quarters, likely hitting a low
point in Q2.
'TOO EARLY' TO TELL
The company said in a letter to shareholders it was too
early to understand the full impact of Apple Inc's privacy policy change which
began rolling out on Monday, but said its integration with a new ad measurement
tool from Apple has increased the number of iOS devices it can target certain
types of ads to by 30%.
Facebook Inc this week said its growth could
"significantly" decline this year as Apple's change makes it harder
to target ads.
Twitter pledged in February a goal to double its annual
revenue to $7.5 billion in 2023 from $3.7 billion in 2020. Responding to
criticism that was summed up by CEO Jack Dorsey this year as "we're slow,
we're not innovative, and we're not trusted," the company has recently
snapped up newsletter platform Revue and podcast company Breaker and teased a
litany of new products.
The company, which last year launched vanishing tweets
called "Fleets" similar to Snapchat's ephemeral features , is also
testing a live audio feature "Spaces" to compete with voice-app
Clubhouse and has teased new ways for creators to make money on the site, from
tipping to "super follows" where fans can pay for exclusive content.
Twitter said it expected total revenue to grow faster than
expenses this year, assuming that the coronavirus is less of a factor and that
it sees "modest impact" from Apple's changes.
But it said in its outlook that stock-based compensation
expenses for this year will amount to $600 million, up from its previous
guidance of between $525 million to $575 million, as the company ramps up
hiring. It forecast capital expenditures to be $900 million and $950 million
for the full year.
Twitter said it expects headcount, as well as total costs
and expenses, to increase at least 25% in 2021 on a year-over-year basis. - Reuters
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