Twitter beats in Q4, though user growth still a problem

Twitter posted $479 million in revenue, on 14 cents per share, easily coming out ahead of estimates

Financial trends and news by Steven Loeb
February 5, 2015
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Shares of Twitter are shooting up, rising over 9% in after-hours trading, after the company came out way ahead of revenue estimates in its fourth quarter earnings, which were released on Thursday.  

The stock had gone up only 1.33%, or $0.54, in regular trading to finish at $41.26 a share. 

The company posted quarterly revenue of $479 million, up 97% year-to-year, handily beating analyst expectations of $453.1 million. Twitter reported non-GAAP EPS of $0.14, easily beating the $0.06 expected by analysts.

"We closed out the year with our business advancing at a great pace. Revenue growth accelerated again for the full year, and we had record quarterly profits on an adjusted EBITDA basis," Dick Costolo, CEO of Twitter, said in a statement. "In addition, the trend thus far in Q1 leads us to believe that the absolute number of net users added in Q1 will be similar to what we saw during the first three quarters of 2014."

Even as it outperformed financially, Twitter continued to struggled in the one area that has been giving it trouble in recent quarters: user growth.

In Q4, Twitter saw its average monthly active users (MAUs) grow only 20% year-to-year to 288 million, That reflects a loss of approximately 4 million net Monthly Active Users in the fourth quarter due to changes in third party integrations. Mobile MAUs represented 80% of the company's total MAUs.

Timeline views reached 182 for the fourth quarter of 2014, an increase of 23% year-over-year.

For once, though, it seems like the company made enough money offset investor fears over its stagnating user growth.

Once again, almost all of Twitter's revenue came from advertising, which accounted for $432 million, a 97% year to year increase. Mobile advertising revenue was 88% of total advertising revenue. Advertising revenue per thousand timeline views reached $2.37 in the fourth quarter of 2014, an increase of 60% year-over-year.

Data licensing, and other revenue, came to $47 million, an increase of 105% year-over-year. Of Twitter's total revenue, $164 million, or 34%, was international, an increase of 149% year-over-year.

GAAP net loss was $125 million for the quarter, compared to a net loss of $511 million in the same period last year.

Twitter is projecting revenue of between $440 and $450 million, with adjusted EBITDA in the range of $89 million to $94 million, for the next quarter. For the full year 2015, it expects to see revenue between $2.3 billion to $2.35 billion, with an adjusted EBITDA in the range of $550 million to $575 million.

Last quarter the company had projected revenue of between $440 and $450 million for Q4, and revenue between $1.365 billion and $1.375 billion for the full year.

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