Twitter Inc (TWTR) Beats On Earnings, Disappoints On User Growth

Twitter Inc (TWTR) Beats On Earnings, Disappoints On User Growth
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Twitter Inc (NYSE:TWTR) released its very first earnings report as a public company after closing bell, and at first, shares jumped 5% as the early numbers looked good. However, that reversed after investors took a closer look at those results.

Breaking down Twitter’s numbers

Twitter Inc (NYSE:TWTR) reported non-GAAP earnings of 2 cents per share—a huge beat—on revenue of $242.7 million. That’s a 116% year over year increase in revenue. Analysts had been expecting the company to report losses of 2 cents per share on $216.86 million in revenue for the December quarter.

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So what was the big problem with that beat? It was all about user engagement, as Twitter Inc (NYSE:TWTR) reported 241 million monthly active users, meaning it added just 9 million users since the last quarter, marking a 30% year over year increase. Mobile monthly active users hit 184 million during the quarter, a 37% increase, meaning they now make up 76% of the company’s total monthly active users.

Twitter Inc (NYSE:TWTR) said its GAAP earnings were a loss of $1.41 per share. Net losses for the quarter were $511 million, while non-GAAP net income was $10 million. The company’s full year revenue rose 110% year over year to $665 million, and its full year net loss was $645 million. Non-GAAP net losses were $34 million, while non-GAAP earnings per share for the full year were a loss of 18 cents. Full year adjusted EBITDA was $75 million, representing an 11% adjusted EBITDA margin.

Twitter highlights new products

Twitter Inc (NYSE:TWTR) announced that timeline views hit 148 billion, a 26% year over year increase. Advertising revenue per thousand views hit $1.49, a 76% increase.

The company said it continued improving return on investment for advertisers by launching several new products, including TV Conversation Targeting, Tailored Audiences, Conversion Tracking and Promoted Accounts in Timeline. It also launched a self-serve advertising platform for small and medium-sized businesses in the U.K., Ireland and Canada and began offering Twitter Alerts, custom timelines and the ability to send and receive photos through direct message and swipe between timelines. The company also closed the acquisition of MoPub during the quarter.

Twitter guides for 2014

Twitter Inc (NYSE:TWTR) projects that its first quarter revenue will be between $230 million and $240 million. The company expects adjusted EBITDA to be between $10 million and $16 million and its stock-based compensation expenses to be between $145 million and $155 million.

For the full year, Twitter Inc (NYSE:TWTR) guided for revenue of between $1.15 billion and $1.2 billion and adjusted EBITDA to be between $150 million and $180 million. It expects to spend $150 million to $180 million on capital expenditures during the year.

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