We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Twitter (TWTR) Q4 Earnings Beat, Revenue Outlook Disappoints
Read MoreHide Full Article
Twitter reported fourth-quarter 2018 non-GAAP earnings of 31 cents per share, outpacing the Zacks Consensus Estimate by 6 cents. The figure also soared 63.2% from the year-ago quarter.
However, shares were down 7.1% in pre-market trading, apparently due to disappointing revenue guidance. Twitter expects first-quarter 2019 total revenues between $715 million and $775 million. At mid-point, the guidance is lower than the current Zacks Consensus Estimate of $762.5 billion.
Moreover, Twitter disclosed new metric — monetizable daily active users (mDAU) — to measure user base. Additionally, the company will discontinue disclosing monthly active users (MAU) after first-quarter 2019.
Top-Line Details
Revenues of $909 million increased 26% on a constant-currency (cc) basis from the year-ago quarter and comfortably surpassed the consensus mark of $869 million.
U.S. revenues (56% of revenues) increased 24% year over year to $505.6 million. International revenues (44.2% of revenues) increased 27% at cc and on a year-over-year basis to $403.2 million in the reported quarter.
Japan remained Twitter’s second largest market and accounted for 15% of total revenues that grew 30% to $138 million.
User Base Details
Average mDAU were 126 million in the reported quarter compared with 115 million in the year-ago quarter and 124 million in the previous quarter.
mDau is defined as “Twitter users who logged in or were otherwise authenticated and accessed Twitter on any given day through Twitter.com or Twitter applications that are able to show ads. Average mDAU for a period represents the number of mDAU on each day of such period divided by the number of days for such period.”
Average US mDAU were 27 million compared with 25 million in the year-ago quarter and 26 million in the previous quarter. Moreover, average international mDAU were 99 million compared with 89 million in the year-ago quarter and 98 million in the previous quarter.
Twitter’s average monthly active users (MAUs) totaled 321 million, down from 330 million in the year-ago quarter and 326 million in the previous quarter.
Notably, abuse reports from people who had an interaction with their alleged abuser on Twitter declined 16% year over year, primarily due to Twitter’s focus on improving the health of the public conversation on the platform. Moreover, enforcement on reported content was 3 times more effective.
Ad Revenue Details
Advertising revenues increased 26% at cc year over year to $791 million. U.S. advertising revenues totaled $425 million, up 24% in a year. International ad revenues grew 21% to $366 million.
Owned-and-operated advertising revenues surged 26% to $749 million.
Ad engagements increased 33% year over year. Click through rates (CTR) grew on a year-over-year basis across the majority of ad types, as ad prediction models and video ad product performance continue to improve. Cost per ad engagement was down 7%.
Video ads accounted for more than half of ad revenues and remained Twitter’s fastest-growing ad format. Strength was witnessed in Video Website Card, in-stream pre-roll and First View ads in the reported quarter.
Data licensing and other revenues jumped 35% from the year-ago quarter to $117 million. The company stated that data and enterprise solutions (DES) grew on a year-over-year basis. This time, MoPub had its highest revenue quarter ever.
Operating Details
Twitter’s non-GAAP total costs and expenses were $618 million, up 21% on a year-over-year basis. Traffic acquisition costs (TAC) were approximately $17 million, down 13% in a year.
Adjusted EBITDA increased 28.9% to $397 million. Adjusted EBITDA margin expanded 200 basis points (bps) on a year-over-year basis to 44%.
GAAP operating income jumped 88% from the year-ago quarter to $207 million.
Guidance
For first-quarter 2019, GAAP operating income is expected between $5 million and $35 million.
For fiscal 2019, management expects GAAP operating expenses to increase roughly 20% year over year. Capital expenditures are expected between $550 million and $600 million.
Twilio, ASGN and Cogent are expected to report quarterly results on Feb 12, 13 and 21, respectively.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?
From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.
This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.
Twitter (TWTR) Q4 Earnings Beat, Revenue Outlook Disappoints
Twitter reported fourth-quarter 2018 non-GAAP earnings of 31 cents per share, outpacing the Zacks Consensus Estimate by 6 cents. The figure also soared 63.2% from the year-ago quarter.
However, shares were down 7.1% in pre-market trading, apparently due to disappointing revenue guidance. Twitter expects first-quarter 2019 total revenues between $715 million and $775 million. At mid-point, the guidance is lower than the current Zacks Consensus Estimate of $762.5 billion.
Moreover, Twitter disclosed new metric — monetizable daily active users (mDAU) — to measure user base. Additionally, the company will discontinue disclosing monthly active users (MAU) after first-quarter 2019.
Top-Line Details
Revenues of $909 million increased 26% on a constant-currency (cc) basis from the year-ago quarter and comfortably surpassed the consensus mark of $869 million.
U.S. revenues (56% of revenues) increased 24% year over year to $505.6 million. International revenues (44.2% of revenues) increased 27% at cc and on a year-over-year basis to $403.2 million in the reported quarter.
Twitter, Inc. Price
Twitter, Inc. Price | Twitter, Inc. Quote
Japan remained Twitter’s second largest market and accounted for 15% of total revenues that grew 30% to $138 million.
User Base Details
Average mDAU were 126 million in the reported quarter compared with 115 million in the year-ago quarter and 124 million in the previous quarter.
mDau is defined as “Twitter users who logged in or were otherwise authenticated and accessed Twitter on any given day through Twitter.com or Twitter applications that are able to show ads. Average mDAU for a period represents the number of mDAU on each day of such period divided by the number of days for such period.”
Average US mDAU were 27 million compared with 25 million in the year-ago quarter and 26 million in the previous quarter. Moreover, average international mDAU were 99 million compared with 89 million in the year-ago quarter and 98 million in the previous quarter.
Twitter’s average monthly active users (MAUs) totaled 321 million, down from 330 million in the year-ago quarter and 326 million in the previous quarter.
Notably, abuse reports from people who had an interaction with their alleged abuser on Twitter declined 16% year over year, primarily due to Twitter’s focus on improving the health of the public conversation on the platform. Moreover, enforcement on reported content was 3 times more effective.
Ad Revenue Details
Advertising revenues increased 26% at cc year over year to $791 million. U.S. advertising revenues totaled $425 million, up 24% in a year. International ad revenues grew 21% to $366 million.
Owned-and-operated advertising revenues surged 26% to $749 million.
Ad engagements increased 33% year over year. Click through rates (CTR) grew on a year-over-year basis across the majority of ad types, as ad prediction models and video ad product performance continue to improve. Cost per ad engagement was down 7%.
Video ads accounted for more than half of ad revenues and remained Twitter’s fastest-growing ad format. Strength was witnessed in Video Website Card, in-stream pre-roll and First View ads in the reported quarter.
Data licensing and other revenues jumped 35% from the year-ago quarter to $117 million. The company stated that data and enterprise solutions (DES) grew on a year-over-year basis. This time, MoPub had its highest revenue quarter ever.
Operating Details
Twitter’s non-GAAP total costs and expenses were $618 million, up 21% on a year-over-year basis. Traffic acquisition costs (TAC) were approximately $17 million, down 13% in a year.
Adjusted EBITDA increased 28.9% to $397 million. Adjusted EBITDA margin expanded 200 basis points (bps) on a year-over-year basis to 44%.
GAAP operating income jumped 88% from the year-ago quarter to $207 million.
Guidance
For first-quarter 2019, GAAP operating income is expected between $5 million and $35 million.
For fiscal 2019, management expects GAAP operating expenses to increase roughly 20% year over year. Capital expenditures are expected between $550 million and $600 million.
Zacks Rank & Other Stocks to Consider
Twitter flaunts a Zacks Rank #1 (Strong Buy).
Twilio (TWLO - Free Report) , ASGN (ASGN - Free Report) and Cogent Communications (CCOI - Free Report) are some top-ranked stocks in the broader computer and technology sector. All the three stocks sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Twilio, ASGN and Cogent are expected to report quarterly results on Feb 12, 13 and 21, respectively.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?
From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.
This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.
See Stocks Today >>