Shares of Twitter (TWTR) are slipping after the company reported better than expected fourth quarter results but gave a weaker than expected first quarter sales forecast and reported tepid user growth. Additionally, the microblogging platform said it will stop reporting monthly active users, or MAUs, after the first quarter in favor of reporting monetizable daily active users, or mDAUs.
QUARTERLY RESULTS: On Thursday, Twitter reported fourth quarter earnings per share of 31c and revenue of $909M, both above consensus forecasts of 25c and $869.5M, respectively. "Through our consistent strategy and solid execution, Q4 was a strong finish to the year. We're delivering great results with revenue up 24% year-over-year, steady sequential growth in total monetizable daily active users and revenue, along with GAAP profitability throughout the year. We're also continuing to demonstrate Twitter's unique value proposition for advertisers as the best place to launch something new or connect with what's happening," Twitter's CFO Ned Segal said. For the first quarter of 2019, the microblogging platform said it sees revenue between $715M-$775M, with consensus at $762.43M, and GAAP operating income to be between $5M-$35M. Twitter also said it expects FY19 capital expenditures of $550M-$600M, FY19 GAAP and cash operating expenses up approximately 20% year-over-year and stock-based compensation expense in the range of $350M-$400M.
DAILY ACTIVE USERS INSTEAD OF MONTHLY ACTIVE USERS: In its earnings release, Twitter announced that the company will stop reporting MAUs after the first quarter in favor of reporting mDAUs. For the fourth quarter, the microblogging platform said MAUs were 321M, compared to 330M in the same period of the previous year and compared to 326M in the previous quarter. Additionally, Twitter said its mDAUs were 126M for the fourth quarter, compared to 115M in the same period of the previous year and compared to 124M in the previous quarter. This was the first time Twitter disclosed its DAUs, with the company's 126M figure coming behind both Facebook (FB) and Snap's (SNAP) DAUs of 1.52B and 186M, respectively.
WHAT’S NOTABLE: Twitter's announcement that it will stop reporting MAUs comes just months after Apple (AAPL) said it will stop disclosing unit sales for the iPhone, iPad and Mac. Despite some concern after the iPhone makers change, Wall Street analysts have called the disclosure worries "noise" and defended Apple's shares.
PRICE ACTION: In afternoon trading, shares of Twitter have dropped over 10% to $30.65.