Twitter Investors Brush Off First-Ever Drop In U.S. Users
Twitter Inc (NYSE: TWTR) shares received quite a drubbing when its Q4 earnings report came out Thursday evening. But is there less to worry about than meets the eye?
The company beat revenue estimates with $710 million and $0.16 in non-GAAP diluted EPS. Analysts expected earnings of $0.12 for the quarter and revenues of $709.9 million.
However, its guidance and user growth may have spooked investors. The company issued 2016 guidance of $595 to $610 million revenue against estimates of $629.3 million. Monthly active users (MAUs) were flat-to-worse for the quarter, although the company claimed in a release "we've already seen January monthly actives bounce back to Q3 levels."
This was the first time since becoming a public company that Twitter saw a drop in its U.S. user base.
The stock plummeted 11 percent after the release, and recently traded at $14.51 in the after-hours session, down 3.1 percent.
Concerning report? According to a Benzinga poll, perhaps not.
With 110 votes at time of writing, 45 percent said there was "nothing" that concerned them from the Q4 report. Thirty-three percent said MAUs were the biggest issue, while guidance (8 percent) earned the least amount of votes.
On the conference call, management listed five focus points for 2016:
- Refine core services
- Become more intuitive Invest in being a leader with live stream (periscope)
- Build tools for creaters and influencers
- Improve safety on the platform
- Will support dev teams who use Twitter to improve services
CFO Anthony Noto said Twitter doesn't look at time spent "holistically" and said searches/DMs were both up year-over-year. Separately, the company said marketing spending in Q1 will be meaningfully lower than in Q4.
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