Twitter Shares Drop as Company Reveals Disappointing User Numbers

Roman Schwartz
February 8, 2019

It's possible the company chose to do so because the daily active user number went up year over year while the number of monthly users went down. After the earnings report for the first quarter of 2019, Twitter will discontinue posting its figures for monthly users, he said.

It expects capital expenditure of between $550 million and $600 million, well above analysts' average estimate of $415 million for 2019. The company said it expected total revenue of between $715m and $775m, the midpoint of which was below the Wall Street consensus of $762m.

The higher expenses could eat into eats earnings, some analysts said. In its guidance, the company offered a revenue range of $715 million to $775 million against analyst consensus of $764.9 million, according to Refinitiv data published by CNBC.

Twitter shares dropped 10 percent after the reveal of its quarterly report, via Reuters. Facebook had more than more than a billion in the same period.

Monthly active users (MAUs) averaged 321 million in the fourth quarter which represents a decrease of 9 million from a year ago.

The monthly active users, however, fell to 321 million in the fourth quarter from 326 million in the third quarter.

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Total advertising revenue surged 23 percent to $791 million in the quarter, with more than half of that figure coming from video ads placed by corporate clients.

"The dip in MAUs also shouldn't be a surprise as Twitter publicly announced in mid-2018 that it was making more-aggressive efforts-though the work is far from done-to clean up the bots and fake users on its social network", Forrester analyst Jessica Liu wrote in an email to Barron's.

Overall revenue in the fourth quarter rose to $909 million, handily beating analysts' estimate of $868.2 million.

Revenue from data licensing and other non-advertising businesses rose 35 percent from a year earlier to $117 million.

Twitter has made its first annual profit in its 13-year history but another fall in the number of its users and a disappointing sales forecast took the gloss off the results and sent its shares down almost 10 per cent.

Daily users rose 9 percent in the fourth quarter to 126 million, a number Twitter is reporting for the first time - and one investors have been asking for as a better gauge of the service's popularity. The shares closed down $3.36 to $30.80 in regular trading, and dropped an additional 4 cents a share in after hours trading.

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