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Twitter Beats Earnings but Falls Short on User Growth; Shares Tumble

Twitter on Thursday posted better-than-expected earnings and revenue in the first quarter, but fell short on user-growth expectations.

Twitter  (TWTR) - Get Twitter, Inc. Report tumbled on Thursday as it posted better-than-expected first-quarter earnings and revenue, but fell short on user-growth expectations. 

Twitter reported earnings of $68 million, or 16 cents a share, vs. a loss of $8.4 million, or 11 cents a share, a year ago. Analysts polled by FactSet had been expecting earnings of 14 cents a share for the quarter.

Revenue totaled $1.04 billion, up 28% from $808 million in the year-ago period and above analysts’ forecasts of $1 billion. Ad revenue rose 32% to $899 million while data licensing and other revenue rose 9% to $137 million. Ad engagement grew 11%.

Twitter’s total number of monetizable daily users grew by 7 million from the fourth quarter to 199 million, but fell shy of analysts’ expectations of 200 million.

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Shared of Twitter tumbled 8.9% at $59.24 in after-hours trading following the release of results. The stock is still up 21% year to date.

Twitter said in a statement that it made "significant progress on our brand and direct response products, with updated ad formats, improved measurement, and new brand safety controls, contributing to 32% year-over-year growth in ad revenue in Q1."

Twitter said it ended the quarter with $8.81 billion in cash, which included net proceeds of $1.42 billion from its offering of convertible notes in March, which in turn is earmarked to fund $954 million convertible senior notes due in 2021.

The results mark a pivotal quarter for Twitter, its first in four years without former President Donald Trump on the platform. In January, Twitter moved to permanently suspend Trump’s account “due to the risk of further incitement of violence” following the fatal insurrection that resulted in the invasion of the U.S. Capitol.

For the second quarter, Twitter said it expects total revenue of between $980 million and $1.08 billion, and a GAAP operating loss of between $170 million and $120 million. 

For the full year, the company is expecting stock-based compensation expenses of approximately $600 million, and capital expenditures of between $900 million and $950 million.