Twitter, Inc. (NASDAQ:TWTR) shares surged as much as 9% in early trade in New York on Thursday, as the company reported better-than-expected 4Q/19 numbers in revenue and active user expectations but missed estimates for earnings per share (EPS).
What Happened
The high-profile social media company posted earnings of $0.25 per share, $0.04 worse than the Street’s consensus of $0.29. Revenues jumped nearly 11% from a year ago to $1.01 billion versus $996.7 million expected. It’s the first time Twitter revenues have broken past the billion-$ mark. Net income came in at $119 million, with a diluted EPS of $0.15. It’s worth pointing out that in Q4/18, Twitter reported a net income of $255 million with diluted EPS of $0.33.
Turning back to Q4/19, Twitter said it experienced the fastest quarterly growth of monetizable daily active users (mDAUs), a number that came in at 152 million versus 147.5 million expected. Twitter sees mDAU as an expansive metric and not comparable to similar metrics from other companies. It measures, it says, “Twitter users who log in and access Twitter on any given day through Twitter.com or…Twitter applications that are able to show ads.”
mDAUs were 126 million in Q4/18.
Twitter also said its advertising revenue jumped 12% year-on-year (y/y) to $885 million as 2019 expenses hit $3.09 billion, an increase of 19% y/y. This resulted in operating income of $366 million and 11% operating margin. Operating income came in at $153 million versus $130 to $170 million guidance.
Twitter Q1/20 Outlook
For the current quarter, Twitter issued in-line guidance that was on the lighter end of expectations. The company said it sees revenue of $825 million and 885 million, compared to the consensus revenue estimate of $873 million. Operating income is expected to be between $0 and $30 million.
Stock Price Action
As of writing, Twitter shares are up $5.48, or 16.40%, to $38.93. Ticker is up 21.7% year-to-date and $29.8% year-over-year. The $31 billion market cap company trades in a 52-week range of $28.63 to $45.86. The consensus price target for TWTR is $34.20.
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