Business News: Twitter Stock Falls on Earnings..
Twitter released its first quarter financial results Thursday, with a mixed reception from investors. The social media giant announced that its total revenue in the first quarter reached $ 1.04 billion, up 28% year-on-year. Ad revenue alone was $ 899 million, with total ad engagement growing 11% year-over-year and cost-per-engagement up 19% year-over-year.
Post called the company’s second-quarter forecast confusing, arguing that the call should have been higher as management indicated a pickup in brand spending in March. The company said revenue is expected to be between $ 980 million and $ 1.08 billion, while the consensus on Wall Street has been that the figure is expected to be $ 1.06 billion.
Wedbush analyst Ygal Arounian wrote in a note Friday that he thinks Wall Street will focus on slowing user growth, noting that investors are increasingly focused on users staying engaged with apps like Twitter now that the pandemic is receding in the United States.
In a note titled “This Birdie Finds Turbulence Out of Thin Air,” MKM Partners analyst Rohit Kulkarni called it a mixed quarter for Twitter. He said advertising revenue growth appears to lag behind peers like Pinterest (PINS) and Snap (SNAP), who reported in early April. He also noticed TwitterUser growth has been weaker than expected.
“While yesterday’s results do not inspire confidence in management’s ability to maintain a consistent cadence in fundamentals, we believe Twitter remains a solid “reopening show” with sports and live events over the summer, “wrote Kulkarni.
Oppenheimer analyst Jason Helfstein also looks forward to the return of live events, saying their suspension weighed on revenue growth. “Although the market has reacted to the weakening outlook for the second quarter, after an optimistic day for investors, we are more optimistic about the cadence of the product and expect brand strength”, in the second half of 2021, wrote Helftstein .
The company also said it expects its headcount to grow 25 percent or more year-on-year in 2021, “increasing in absolute dollars over the course of the year.” He concluded his report by saying with optimism that he expects total revenue to grow faster than spending this year, assuming “the global pandemic continues to improve.”