Twitter has released its Q4 earnings report, but the stock took a hit after providing light guidance. Here’s how Twitters Q4 numbers break down:
- Revenue totaled $909 million–a 24% year-over-year increase
- Advertising revenue totaled $791 million, an increase of 23% YOY
- U.S. revenue totaled $506 million, an increase of 24% YOY
- International revenue totaled $403 million, an increase of 24% YOY
- Average monetizable daily active users (mDAU) were 126 million, up 9% YOY
- Monthly active users (MAU) totaled 321 million, a 3% increase YOY, but down 5 million from Q3
While Twitter’s Q4 numbers aren’t bad, the stock took a 7% beating in pre-market trading. That’s mostly because of the company’s disappointing guidance and the fact that it announced it will stop reporting monthly active users. As Twitter revealed in its letter to shareholders:
We want to provide something valuable to people on Twitter every day, and we believe that monetizable DAU (mDAU), and its related growth, are the best ways to measure our success. Monetizable DAU are Twitter users who log in and access Twitter on any given day through twitter.com or our Twitter applications that are able to show ads. Our mDAU are not comparable to current disclosures from other companies, many of whom share a more expansive metric that includes people who are not seeing ads. We considered changing our disclosure to be comparable to other companies, but our goal was not to disclose the largest daily active user number we could. We want to align our external stakeholders around one metric that reflects our goal of delivering value to people on Twitter every day and monetizing that usage. So, starting this quarter, in addition to sharing the growth in mDAU as we have since 2016, we are disclosing the absolute number of average mDAU (previously referred to as DAU), for both the US and international markets. As mDAU will be the metric we use to show the size of our audience and engagement going forward, we will discontinue disclosing MAU after Q1’19.
This change in disclosure does not impact the objectives which bring advertisers to Twitter or the information to which they have access today. Advertisers come to Twitter because we have one of the most valuable audiences when they are most receptive, and we generate a high return on investment against their campaign objectives whether they are launching a new product or connecting with what’s happening on Twitter.
As for its guidance, Twitter says it expects Q1 total revenue to be between $715 million and $775 million–softer than the street would have liked.