UPDATED with CEO comment on Disney+ launch, other Q4 metrics, latest stock price: Twitter early Thursday posted $1.01 billion in fourth-quarter revenue, beating Wall Street estimates in a crucial quarter that’s being heavily scrutinized after some glitches in its advertising products resulted in disappointing sales growth in the quarter before.
Earnings of 0.25 per share came it below estimates (of between 0.27 cents-0.29 cents). Net income was $118.8 million. Operating income was $153 million. Costs for the quarter to upgrade its systems rose 22%, weighing on profits.
But, in a high point, montetizable daily active users were 152 million versus the 147.5 million expected. It was the fastest quarter of growth of so-called mDAUs, Twitter said, and the metric reached its highest level. It measures users who log in and access Twitter on any given day through Twitter.com and Twitter applications that are able to show ads.
On a post-earnings conference call, executives touted 20% growth in U.S. advertising revenue and gave a shout-out to work around the launch of Disney+, which launched in November.
“We were able to help them with a critical launch, where it was obviously a global launch. We helped them all over the world but you saw it resonate with people in the United States, where they advertised the app, were they advertised the shows that people can see, where they want to help people, help form their opinions on the service as well as download the app. That’s a great example of a success story from Q4,” said Twitter CEO Jack Dorsey.
PR Week named Disney+ the best brand launch on Twitter in 2019. The streaming service created a thread of 600 tweets, each representing a show from a content property under the Disney+ umbrella.
The company also cited a partnership with ABC and the Academy of Motion Picture Arts and Sciences to live-stream the “Oscars All Access” official red-carpet pre-show and deals with the NBA and Turner Sports to bring more live and on-demand NBA content to Twitter.
Total U.S. revenue of $591 million for the quarter was up 17% from the year before. International revenue was $416 million, up 3%. Japan remains Twitter’s second largest market, contributing $139 million, or 14% of the total.
Total advertising revenue was $885 million, an increase of 12%. Data licensing and other revenue totaled $123 million, up 5%.
Total ad engagements increased 29%, resulting primarily from increased impressions driven by audience growth and improved clickthrough rates, which grew on a year-over-year basis across the majority of ad types due to ongoing improvements in ad relevance.
Separately in the quarter, Twitter said efforts to protect the integrity of election-related conversations and proactively limit the visibility of unhealthy content resulted in a 27% decline in bystander reports on Tweets that violate terms of service.
The company said it made steady progress on upgrading and rebuilding its core ad server and is focused on completing the work in the first half of 2020. It’s been addressing the third-party measurement issues encountered in the third quarter that slowed growth, created such jitters in the market and hit the stock.
Shares, which had been down about 14% since the previous earnings, are up more than 15% in mid-morning trade today alone.