Twitter sticks with ambitious targets despite earnings miss
SAN FRANCISCO
Twitter has reported that revenue and its user base grew less than expected, but the platform stuck with ambitious growth targets for the coming years.
The platform had an average of 217 million daily active users in the fourth quarter, up from 192 million a year earlier. Feb. 10’s earnings release showed that Twitter was about 1 million under analysts’ expectations for users at the end of 2021, but still increased by about 6 million from the previous quarter.
For the full year 2021, the group’s revenue came in at $5.08 billion and was $1.57 billion in the quarter, slightly below analyst expectations.
But the San Francisco company reported a net loss of $221 million for the year largely tied to the settlement of a shareholder lawsuit. It said it would pay $809.5 million to settle allegations that the company misled investors about how much its user base was growing and how much users interacted with its platform.
In the report, the company said it was still aiming for 315 million daily users by the end of 2023, and at least $7.5 billion in income that year.
“Our strong 2021 performance positions us to improve execution and deliver on our 2023 goals,” said CEO Parag Agrawal, who took over from founder Jack Dorsey last year.
Analysts were a bit more measured in their view of the company’s goals.
“It’s going to be tough, but not totally impossible,” wrote Market Intelligence analyst Jasmine Enberg, referring to the 315 million target.
Twitter “will need to add over 12 million each quarter over the next two years to reach 315 million,” Enberg noted.
“With Agrawal in charge, we can expect more product changes and innovation at an even faster pace than we’ve seen over the past two years,” she added.
Advertising revenue, Twitter’s main source of revenue, grew 37 percent for the year and 27 percent for the quarter, but was also below predictions. The company’s quarterly net profit was $182 million.
Twitter’s board of directors also approved a new share buyback program for $4 billion, replacing the previous $2 billion program initiated in 2020 and completed to the tune of $1.2 billion.
Wall Street reacted positively to this latest announcement, with shares up just over 1 percent to around $38.
One big worry for investors has been Apple’s iOS privacy changes, which make it tougher for companies to track people for advertising purposes. That was part of the reason for Facebook parent Meta’s stock plunge last week.
