Twitter Inc (TWTR) Q4 Earnings: What To Expect

Twitter Inc (TWTR) Q4 Earnings: What To Expect
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Twitter Inc (NYSE:TWTR) is scheduled to report its fourth quarter results on Wednesday, February 5 after the bell. It will be the microblogging company’s first quarterly result since Twitter went public on November 6, 2013. Only 27% of sell-side analysts have a Buy rating on the stock, with an average price target of $50. The stock is trading 129% above its IPO price of $26, indicating that investors have high expectations from the San Francisco-based company.

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Twitter’s user engagement to see slight growth

Stern Agee analyst Arvind Bhatia said in a research note to investors that he expects Twitter Inc (NYSE:TWTR)’s monthly active user base (MAU) to growth 5% QoQ and 32% YoY to 244 million, compared to 232 million at the end of Q3. The U.S. MAU is expected to rise 24% YoY to 56 million, while international figure is expected to jump 34% YoY to 188 million.

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Stern Agee also estimates Twitter Inc (NYSE:TWTR)’s user engagement to improve during the quarter, albeit slightly. The total timeline views are expected to rise 6% QoQ to 168.7 billion. The timeline view per monthly active user is likely to rise 1% sequentially to 691. Of that, U.S timeline views per MAU should increase 1% to 823, and international views are also expected to inch up 1% to 652.

But the key part is how well Twitter Inc (NYSE:TWTR) monetizes its more than 300 million users. Bhatia expects the ad revenue per thousand timeline views to jump from $0.97 in Q3 to $1.06 in Q4. That’s a 9% sequential growth. The U.S. ad revenue per TTV would be an impressive $2.82, but international figures are expected to lag at just $0.39.

Twitter’s ad revenue to jump 80%

Twitter Inc (NYSE:TWTR)’s ad revenue is expected to jump 80% YoY and 17% QoQ to $179 million. Meanwhile, data licensing revenue should rise 25% YoY to $16 million. That takes the total revenue to $195 million, up 74% from the previous year. But Wall Street appears more bullish than Stern Agee, with a revenue estimate of $218 million. Over the past few months, Twitter has unveiled several lucrative new ways to boost its advertising revenues by adding new features to its Target Ads. Twitter’s Q4 EBITDA is expected to come at $25 million, compared to the consensus estimate of $24 million. Adjusted EBITDA margins are expected to improve from 5.5% in Q3 to 13% in the fourth quarter. But that would still be lower than 15.7% in the same period last year.

Stern Agee has a Neutral rating on the stock, mainly due to the stock’s higher premium compared to its peers. Twitter Inc (NYSE:TWTR) shares skidded 0.73% to $60 at 11:03 AM EST.

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