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Twitter’s Q1 numbers zoom past street estimates, $787Mn in revenues but with a drop in MAUs

It has been a strong performance from Twitter on the Wall Street. The company has come up with its first Quarter results for 2019 and they have beaten street estimates by a decent margin.

The company has reported $787 Million in revenues for Q1’2019, a good uptick from the average analyst expectations of about $775 million in sales ($742-$815 million range). In terms of EPS (earnings per share), the company $0.25 per share, close to double of the $0.15 per share ($0.10-$0.20 range) expected by wall street analysts. In EPS terms, the company has even beaten upper range of street estimates.

In terms of profitability in Q1, revenue outperformance, in combination with lower expenses, resulted in better-than-expected profitability, with GAAP operating income of $94 million and GAAP operating margin of 12%.

However, despite a strong financial performance, the company continues to face headwinds in terms of MAUs. Monthly active users declined to 330 Million as compared to last year’s similar quarter. Though this was an increment when compared with the preceding quarter, signalling positive growth in regaining lost MAU ground.

Monetizable daily active users — Twitter’s new and preferred metric for user numbers — were 134 million in the quarter, up 11 percent on a year ago. It needs to be noted, that the company will drop its “MAU” numbers from the next quarter since that is a Number wherein it has received continued backlash. Twitter’s userbase has been stagnating for quite some time, even though monetizable users have been growing at a decent pace. As a result, the company will now switch to reporting mDAUs instead of the usual MAUs.

Wall street has responded voraciously to the company’s strong performance, with the stock going up by as much as 15% at the time of reporting.

Diving deeper into revenue by sources, total advertising revenue was $679 million, an increase of 18%, or 20% on a constant currency basis. Year-over-year growth accelerated in the US relative to Q4, with ad revenue up 26%. By product, video ad formats continued to show strength, notably from our Video Website Card and in-stream pre-roll ads.

Data licensing and other revenue totaled $107 million, an increase of 20%. In its letter to shareholders and investors, the company mentioned that its Data and enterprise solutions (DES) continues to see “new customer opportunities” and use cases as well as smaller customers adopting its critically acclaimed selfservice APIs. As a reminder from last quarter, the company is now largely through our multiyear enterprise renewal cycle in DES. As a result, many of our largest partners are now at market pricing and data licensing revenue growth is likely to moderate for the full year.

Summing it up, Twitter delivered net income of $191 million, net margin of 24%, and diluted EPS of $0.25 and grew its headcount sequentially, ending the quarter with more than 4,100 employees.

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Twitter’s Q1 numbers zoom past street estimates, $787Mn in revenues but with a drop in MAUs


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