Twitter dropped its earnings before the opening bell on Thursday, with the bellwether for digital advertising beating estimates amid the coronavirus pandemic. Its share price surged nearly 5% in pre-market trading.
The Jack Dorsey-run social network posted revenue of $808M in the first quarter of 2020, which was up 3% year-over-year and beat Wall Street analyst expectations of $776M.
In its earnings announcement, Twitter said it had a “strong start” to the quarter, but added that the momentum was somewhat curtailed by “widespread economic disruption related to COVID-19” in March.
“As an indication of the rapid change in advertising behavior, from March 11 (when many events around the world began to be canceled and many in the US began sheltering in place) until March 31, our total advertising revenue declined approximately 27% year over year,” Twitter said.
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The tech company recorded 166M average monetizable daily active users in Q1, which was an increase of 24% on the same period in 2019, and was its highest rate of growth since adopting the user measurement last year.
Twitter said it saw “increased engagement due to the COVID-19 pandemic” and while its ad revenue took a battering in March because of the crisis, at the same time it saw a “significant acceleration” in usage.
The company did not provide guidance for the second quarter and has previously suspended full-year guidance, but said it had shifted priorities because of the economic downturn to focus on revenue products, particularly performance ads.
Twitter added that it is cutting costs through scaling back plans to increase its workforce by 20% this year, while travel and customer events have been “significantly curtailed.” The company said it remains committed to building out a new data center.
Twitter incurred an operating loss of $7M in the first quarter, compared to an operating income of $94M over the same three months last year.
Twitter’s numbers at a glance:
Revenue: $808M, up 3% year-over-year (analysts expected $776M)
Earnings per share: $0.11 (expected $0.10)
Average daily active users: 166M, up 24% year-over-year (expected 164M)
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