Twitter’s Earnings Report Falls Short, Company Announces $4 Billion Buyback

February 10, 2022

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By Cristian Bustos. Originally published at ValueWalk.

Twitter Inc (NYSE:TWTR)’s earnings report for the fourth quarter missed analysts’ estimations. Not only did earnings and revenue fall short but also user daily user growth took a dent. Upon the release of the results, the social media company announced a $4 billion share buyback program.

Q4 2021 hedge fund letters, conferences and more

Results

As reported by CNBC, Twitter missed on earnings, revenue, and user growth expectations according to its earnings report Thursday. The company reported earnings per share of 33 cents —adjusted— against a 35 cents expectation.

Further, Twitter accrued revenue of $1.57 billion for the quarter vs a $1.58 billion estimate. In the same line, Monetizable Daily Active Users (mDAUs) reached 217 million, one million below expectations according to StreetAccount.

“The company provided revenue guidance for the next quarter ranging from $1.17 billion to $1.27 billion, while analysts had expected about $1.26 billion, according to Refinitv.”

Upon the report, the company authorized a $4 billion share buyback program, whose half will be an accelerated share repurchase with remaining shares available for gradual repurchase.

Outlook

Jesse Cohen, a senior analyst at Investing.com, said “Twitter’s stock buyback plan is helping investors overlook the company’s relatively weak results and outlook.”

Twitter’s Q42021 earnings report is the first one with CEO Parag Agrawal at the helm after taking over from Jack Dorsey, who stepped down in November. It replicates the impact of macroeconomics on big tech and internet giants such as Meta and Snap.

In a statement in the earnings release, CFO Ned Segal, however, said the company’s previously set objectives of attaining 315 million mDAUs in 2023’s fourth quarter and a minimum of $7.5 billion in revenue by the end of that year, remained untouched.

The company also said of Apple Inc (NASDAQ:AAPL)’s privacy changes on iOS: “Although retooling our revenue products in light of Apple’s privacy-related iOS changes took additional time, energy, and resources in 2020 and 2021, we believe that our product improvements have helped reduce the impact on Twitter.”