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Twitter Soars 20% After Smashing Expectations, Despite Decline In US Users, Ad Revenue

Courtesy of ZeroHedge. View original post here.

Twitter shares have stormed out of the gate, following today’s Q4 earnings which smashed expectations, with revenue of $731.6 million, up 2% Y/Y, beating the highest estimate ($709MM) and certainly the consensus of $686.4MM, while EPS of 19 cents was also above the 14 cent estimate.

Twitter was quick to point out its reversal in revenue noting that “total revenue in Q4 was $732 million, reflecting year-over-year growth of 2%, as compared to a decline of 4% in Q3 2017, a decline of 5% in Q2 2017, and a decline of 8% in Q1 2017.”

Commenting on the result, Twitter said that “Q4 was a strong finish to the year with total revenue increasing 2% year-over-year, and owned-and-operated (O&O) advertising revenue increasing 7% year-over-year, reflecting better-than-expected growth across all major products and geographies.”

Also of note, EBITDA of $308.2MM was over 20% higher than the $241.6MM expected.

The company’s outlook was also impressive, with Twitter predicting that in Q1, Adjusted EBITDA would be between $185 million and $205 million, vs est of $188.3MM, on adjusted EBITDA margin to be between 33% and 34%. For the full year, Twitter expects capital expenditures to be between $375 million and $450 million.

And yet, not all was well, for one the number of MAUs failed to grow sequentially (up 4% Y/Y), and at 330MM, missed expectations of 333MM. More ominous, and an echo of recent events at Facebook, Twitter’s US MAUs declined by 1 million.

Also a concern: US ad revenue tumbled by 10% to $342MM from $382MM a year earlier.

Not helping is the sharp drop in ad engagements, which at 75% were down by more than half from the year ago period.

This is how the company explained the drop in US revenue:

Total US revenue was $406 million, down 8% year-over-year. Total international revenue was $326 million, increasing 17% year-over-year. We saw continued regional strength in Asia Pacific and improvement in some EMEA markets. Japan grew 34% year-over-year and contributed $106 million, or 15% of total revenue.

For now, however, Twitter shareholders like what they see – which perhaps is the better than expected outlook, and have sent the stock soaring over 20% on what appears to be an aggressive short squeeze.

Twitter shares are back at the highest since July 2015

Source: Twitter


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