Twitter, last night (Nigerian Time) reported stellar earnings that beat expectations across the board, and guided higher:
- Q4 revenue of $243 million, up 116% year-over-year, beating estimates of $218 million
- Q4 GAAP EPS of ($1.41) and non-GAAP EPS of $0.02, beating estimates of ($0.02)
- Q4 net loss of $511 million and non-GAAP net income of $10 million
- Q4 adjusted EBITDA of $45 million, representing an adjusted EBITDA margin of 18%
- Sees Q1 revenue of $230-$240 million, higher than the consensus estimate of $214.9 million
In other words everything was great, with Twitter beating everything and the stock should be soaring until this happened;
The chart above was so shocking investors gave little benefit to its impressive results. It was revealed shortly after they released the results. The first chart depicts a massive dip in registered users as only 9milllion new active users registered to twitter last year in the world. Only about 1 million new registered active users in the US in one month. In addition timeline views (the number of times people actually scroll through twitter feeds) dropped 26% around the world and 14% in the US month to month.
Why is this important? Well, since twitter makes money through ads, a stunted growth in user base and interaction means advertisers do not have new users that they can advertise their products or services thus they may stop to advertise on twitter thereby threatening twitters future revenue stream. Is the market short sighted? Well in some ways they are considering the way they reacted ensuing the eventual sell offs.
