Twitter Stock ↓10% Despite 5th Consecutive Quarterly Profit, Rise In Daily Active Users
UPDATE: Twitter posted its fifth profitable quarter in a row on Thursday in a pre-market report to investors. But that was not enough to satisfy the market which sent the stock down almost 10% in early afternoon trading.
At 1:30 PM ET, Twitter's stock was trading at $30.90 USD, down $3.26 or 9.54%.
The San Francisco-based social media giant’s fourth-quarter earnings beat analysts’ expectations coming in at 31 cents per share – up six cents from the 25 cents per share during the same period last year.
Twitter also posted overall revenue up 24 percent to $909 million, which beat an analyst revenue forecast of $86.1 million, while ad sales, which comprise the bulk of Twitter’s overall revenue, total $791 million, up 23 percent.
But, for the first time, Twitter also reported its average daily active users at 126 million. While ticking upward, daily usage – the social network's most monetizable metric – was less than analysts had anticipated. Plus overall total monthly users of 321 million for the quarter were down slightly from 330 million in the same period last year.
Re/code offered this analysis:
Twitter has 126 million daily users, which is 60 million fewer users than Snapchat (and a lot fewer users than the core apps owned by Facebook). That means roughly 39 percent of Twitter’s monthly active users are on the app every day […]
Twitter will tell you that it’s not fair to compare directly to Snapchat. That’s because Twitter says it is only counting users who could be exposed to ads — what it is referring to as its “monetizable” audience. Snapchat, Twitter would argue, counts users who open the app, send a message, and leave without ever getting to the part of the app where Snapchat serves ads.
The company is currently forecasting increased operating expenditures during fiscal 2019, while Twitter stock was down $2.78, or 8 percent, at $31.28 before the market opened Thursday.