Twitter reported a strong finish to 2019, with fourth-quarter revenue topping its guidance and its best quarter for user growth in the year. The company said progress on improving its products and strength in US advertising drove the results. It forecast an increase in spending in 2020 to maintain the growth momentum.
The company finished the year with an average 152 million daily active users, up 21 percent from Q4 2018. Revenue rose 11 percent to USD 1.01 billion in Q4, led by a 20 percent increase in US ad revenue. Twitter attributed the growth to better machine-learning models to provide more relevant content to users, as well as improvements such as Topics to make it easier for users to find content and join conversations.
Operating profit was still down to USD 153 million from USD 207 million a year ago, on costs for investing in product improvement. The figure was in line with Twitter's guidance. The net result was a profit of USD 119 million or 15 cents a share, down from USD 255 million a year earlier.
Twitter ended the year with 4,800 employees, up 24 percent from 2018. Capital expenditure increased 10 percent to USD 535 million in 2019, and adjusted free cash flow fell to USD 769 million from USD 853 million in 2018. The company ended the year with USD 6.64 billion in cash, after raising USD 692 million in long-term debt in December.
For the new year, Twitter said it expects operating costs to increase around 20 percent, as it grows headcount by 20 percent. The company plans hiring especially in engineering, product, design, and research, as it focuses on accelerating development, improved health on the messaging platform and increased revenue durability. Estimated capex of USD 775-825 million for 2020 will also include construction of a new data centre.
For the first quarter, the company forecast revenues of USD 825-885 million and an operating result of breakeven to a profit of USD 30 million.
