Twitter expects losses amid global pandemic
Twitter is withdrawing its revenue and operating income guidance for the first quarter of 2020, as well as its outlook for expenses, stock-based compensation, headcount and capital expenditures for the full year due to the growing impact of COVID-19 on the global operating and economic environment and their effect on advertiser demand.
The social networking company says while the near-term financial impact of this pandemic is rapidly evolving and difficult to measure, based on current visibility, the company expects Q1 revenue to be down slightly on a year-over-year basis.
Twitter also expects to incur a GAAP operating loss, as reduced expenses resulting from COVID-19 disruption are unlikely to fully offset the revenue impact of the pandemic in Q1.
According to Twitter, global conversation about COVID-19 as well as ongoing product improvements are driving strength in total monetisable daily active users (mDAU), with quarter-to-date average total mDAU reaching approximately 164 million, up 23% from 134 million in Q1 2019 and up 8% from 152 million in Q4 2019.
“Twitter’s purpose is to serve the public conversation, and in these trying times our work has never been more critical. We’re seeing a meaningful increase in people using Twitter, and our teams are demonstrating incredible resilience adapting to this unprecedented environment,” said Jack Dorsey, Twitter chief executive officer.
“We’ll continue to navigate this environment focusing on supporting our employees, customers and partners, while strengthening our service for everyone around the world and adjusting to a new operating and economic environment.”
“Twitter had a strong start to the year before the effects of COVID-19 began spreading more broadly, including a successful Super Bowl and overall strength in the US. The COVID-19 impact began in Asia, and as it unfolded into a global pandemic, it has impacted Twitter’s advertising revenue globally more significantly in the last few weeks,” says Ned Segal, Twitter chief financial officer.
“We have made solid progress on our consumer and revenue product priorities and we remain confident in our opportunity and strategy. We hope everyone stays healthy and safe.”
The company will provide an update on its Q1 2020 earnings call on 30 April.