Twitter Inc (NYSE:TWTR) will release its very first earnings report as a public company next month, and investors are practically chomping at the bit. But with expectations running so high, will the company be able to deliver? RBC Capital analysts think so. In fact, they think Twitter may even beat those expectations.

Twitter Earnings

However, they note that the company’s shares have been volatile, and as a result, they have included Twitter on this list of Internet companies with the greatest risk to their fourth quarter earnings reports. They said although Wall Street estimates for the company appear to be reasonable, the company is quickly innovating new products for both advertisers and users. In addition, there’s been so much positive PR from the company’s initial public offering that

Twitter reports Feb. 5

Mark S. Mahaney and his team are expecting Twitter Inc (NYSE:TWTR) to report revenue of $235 million, which is ahead of Wall Street estimates of $217 million. They are projecting non-GAAP losses per share of 1 cent, which is also ahead of Wall Street, which projects a loss of 3 cents per share. They’re expecting EBITDA of $31 million for the fourth quarter.

The RBC Capital team said their intra-quarter data points look good. Specifically, they examined their own advertiser survey, which covered “several hundred advertising professionals” and brought a number of positive results for Twitter Inc (NYSE:TWTR). First, they say the company’s ad platform is improving, as 40% of those who responded saw increased Twitter spend in increased return on investment through Twitter over the last six months.

Second, 60% of their survey respondents said they expect to increase their Twitter budget over the next 12 months. And third, the micro-blogging site has shown “significant ad growth spend potential,” as 82% of those surveyed use Facebook Inc (NASDAQ:FB) as a marketing channel, while just 71% use Twitter Inc (NYSE:TWTR). The RBC team thinks Twitter will be able to close the gap with Facebook over time.

What to look for in Twitter’s report

They will be looking for a few key items when Twitter Inc (NYSE:TWTR) reports its fourth quarter results. First, they’re looking for trends in revenue growth, particularly advertising, which makes up 90% of the company’s revenue. It reaccelerated to 123% growth in the third quarter, and the RBC team thinks it will keep this momentum up.

They’ll also be looking at user growth and engagement, as  Twitter Inc (NYSE:TWTR) had 232 million monthly active users as of the third quarter—a 39% year over year increase. They expect this growth to decelerate a bit to 38% in the December quarter and note that the company still has a ways to go to catch up with Facebook Inc (NASADAQ:FB). However, they say the company is closing the gap.

And third, the analysts will be looking at the monetization gap between Twitter and Facebook. Twitter received 66 cents for each monthly active user in the third quarter, compared to $1.51 per user for Facebook. However, they note that Twitter grew its monetization 61% year over year, compared to Facebook’s 40% growth.

They maintained their Outperform rating and $60 per share price target on Twitter Inc (NYSE:TWTR), saying they see it becoming “one of the Web’s leading utilities,” along with Google Inc (NASDAQ:GOOG),, Inc. (NASDAQ:AMZN) and Facebook Inc (NASDAQ:FB).