Twitter Shares Slide After Q1 Revenue Beat As CFO Cautions on April Ad Sales

Twitter, which first echoed comments from Facebook in suggesting that ad sales declines in April are starting to subside, urged investors to "look to March" for a near-term guide.

Twitter Inc. TWTR posted stronger-than-expected first quarter revenues Thursday, offsetting a surprise loss and sending its shares sharply higher in pre-market trading.

However, a warning from CFO Ned Segal to investors on a conference call to "look to March" for an indication on near-term ad sales growth reversed those gains amid a broader market downturn.

Twitter said said it posted a 1 penny per share loss for the first three months of the year, compared to a 10 cent per share profit in the first quarter of 2019. Daily active users, however, rose 24% to 166 million, helping revenues rise 2.7% to a forecast-beating $808 million.

In a separate letter to shareholders, Twitter also echoed comments from Facebook Inc.  (FB) - Get Report in that ad sales declines in April are starting to "subside as work and travel restrictions were gradually lifted."  

"During the first quarter, we made progress on our two most significant revenue product priorities. Our first priority is our ad server rebuild, which we are focused on completing by the end of Q2," said CEO Jack Dorsey. "This rebuild will transition our platform to microservice architecture and we expect it will result in more efficient operation, faster innovation, and better ability to experiment. We were pleased that some of our new services on the ad server successfully handled record Super Bowl ad traffic in February."  

"In light of the current operating and economic environment, we have shifted resources and priorities to increase focus on our revenue products, particularly performance ads beginning with MAP, with the goal of accelerating our long-term roadmap," he added. "We have also reduced our company hiring and non-labor expense plans to lower our expense growth while continuing to focus our investments on Engineering, Product, and Trust & Safety, ensuring our resources are allocated against our most important work."  

Twitter shares were marked 4.7% lower in early trading following the earnings release and the conference call Thursday to change hands at $29.83 each.