Twitter Hits 152 Million Daily Users, Stock Soars

The social media company, led by CEO Jack Dorsey, posted its first $1 billion revenue quarter, with its stock price rising in pre-market trading.
Social media giant Twitter on Thursday reported fourth-quarter earnings and revenues, underpinned by improved growth as its number of daily active users rose 21 percent to reach 152 million, against a year-earlier 126 million, and up from 145 million users in the most recent quarter.

The strong daily active user growth — the main metric for the company in measuring audiences — due to new products on the platform sent Twitter shares up by over 7 percent in pre-market trading to $35.89.

The San Francisco-based social media company, led by CEO Jack Dorsey, reported adjusted earnings of 15 cents per share for the fourth quarter, and earnings per share of 25 cents, which missed on a Wall Street consensus of 29 cents.

Quarterly revenue rose 11 percent to $1.01 billion, which beat a Wall Street estimate of $996.7 million. “We reached a new milestone in the fourth quarter with quarterly revenue in excess of $1 billion, reflecting steady progress on revenue product and solid performance across major geographies, with particular strength in U.S. advertising,” said Ned Segal, Twitter’s CFO.

Advertising revenue jumped 12 percent to $885 million. Data licensing and other revenue was up 12 percent to $123 million.

U.S. revenue rose 17 percent to $591 million, driven by 20 percent growth in advertising, which included Twitter helping the Disney+ streaming service to launch by touting new shows and “helping form opinions around the service, as well as downloading the app,” Segal told analysts. International revenue climbed only 3 percent to $416 million.

Twitter said late last year that it would stop accepting paid political advertisements and issue advertisements, unlike rival Facebook, which has attracted scrutiny for not fact-checking campaign ads.

In the run-up to the 2020 U.S. presidential election, the social media giant said it has used machine-learning models to increase efforts to remove fake or manipulated content from its service “to protect the integrity of election-related conversations and proactively limit the visibility of unhealthy content on Twitter.”

“Misleading information is probably the biggest challenge facing us in our industry. This will be a key focus for us as we all continue to broaden the service,” CEO Dorsey told analysts during a morning call. He also discussed his much-heralded travels; Dorsey spent much of 2019 touring the world, including to visit satellite offices.

“I haven’t made any plans just yet for this year, but I do expect I will travel,” he said, adding that Twitter management could deal with his frequent absences from the company headquarters. “I don’t fear any slowness as we work to distribute our workforce now and I do think we have to build a company that’s not entirely dependent on San Francisco,” Dorsey said.

To do that, he added Twitter needed to expand its management beyond San Francisco to avoid being bound by time zones and to get more perspective on world markets. “As we look forward, we’re reaching a talent pool that expects a lot more remote work and expects to work outside of California and outside of San Francisco, and we should be building a company around that,” Dorsey argued.

He also said Twitter needed to hire from an increasingly global talent pool to speed up product innovation.

Feb. 6, 6 a.m. Updated with comments by top Twitter execs made during a morning analyst call.

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