Twitter lifted daily user numbers by almost a quarter in Q1 but reported results under expectations, impacted by the coronavirus pandemic. Revenues for the quarter rose 3 percent year-on-year to USD 808 million, reflecting a strong start to the quarter and later heavy hit by the covid-19 virus. Twitter said reduced expenses partially offset the revenue shortfall, resulting in an operating loss of USD 7 million, against a profit of 94 million the year before. The net loss went to USD 8 million, with a diluted loss per share of USD 0.07, from a profit of 191 million and 0.25 per share.
Advertising revenue declines in March
Total advertising revenue for the quarter lifted by USD 3 million from the year before to USD 682 million, with performance going as expected from January to early March, and then sinking in early March when the pandemic became global. From 11 to 31 March, ad revenue decreased by 27 percent, with particular weakness in the US and subsiding weakness in Asia.
The company said that faced with the pandemic, it has taken action to update its policies, increased its use of machine learning and automation against potentially abusive and manipulative content, ensured the continuity of its service and partnered with advertisers to adapt their campaigns to the current situation.
Growth in daily active users hits record high
The number of daily active users rose 24 percent year-on-year to 166 million and was up from 152 million in the fourth quarter. The increase, the company’s highest in a quarter to date, was driven by typical seasonal strengthen but also the “global conversation” around the pandemic. Numbers went up by 17 percent in the US and 26 percent at international.
The company ended the quarter with USD 7.7 billion in cash, up from 6.64 billion at end December. Net cash provided by operating activities amounted to USD 247 million, off from 352 million the year earlier. Capex meanwhile increased to USD 121 million from 81 million. The company continued to generate positive free cash flow, with adjusted free cash flow of USD 126 million, against 271 million in 2019.
Headcount growth in lower gear, but not stopped
Looking ahead, Twitter said full year-capex will be affected by the pandemic and that IT supply chain constraints will hit build-out and near-term capacity timing. The company said it has shifted its resources and priorities to focus on revenue products, particularly performance ads beginning with MAP (Mobile Application Promotion ad format). The company has also reduced hiring and reduced other expenses, after saying it wanted to grow headcount this year by 20 percent. It still wants to invest in Engineering, Product and Trust & Safety.
