The San Francisco-headquarter Twitter Inc posted its second profitable quarter in the 12-year history but the share price of the social media giant Twitter fell by more than 2% after the earnings release.
The San Francisco-headquarter Twitter Inc posted its second profitable quarter in the 12-year history but the share price of the social media giant Twitter fell by more than 2% after the earnings release. Twitter Inc reported better-than-expected quarterly results, being profitable for the second time in last 12 years but lower growth outlook and decline in revenue guidance steered the stock to lose more than 7% in the intraday dealings.
In the first quarter of the financial year 2018-2019, “adjusted EBITDA was $244 million or 37% of total revenue, compared to $170 million or 31% of total revenue for the same period last year,” Twitter said in an SEC filing. Twitter Inc said its revenue growth would slow this year and costs will rise as it works to fight the spread of hate speech and allegations of election manipulation through its service, Reuters said in a news report.
Commenting on the future outlook, Twitter said adjusted EBITDA to be between $245 million and $265 million for the second quarter. Following the lower growth outlook, shares of Twitter Inc plunged as much as 7.66% to a day’s bottom of $28.14. The stock of Twitter closed down 2.36% at Rs 29.75 on New York Stock Exchange.
Twitter reported a rise of 21% year-over-year in the first-quarter revenue to $665 million. For the succeeding quarter, Twitter said that adjusted EBITDA margin will remain between 37% and 38%.
Twitter said its tally of daily active users grew 10% year-over-year, lower than the 12% to 14% maintained in recent quarters, a change that “has spooked investors,” Reuters reported citing Michael Pachter, Analyst, Wedbush Securities. Twitter shares trade at 42 times expected earnings over the next 12 months, roughly double the 20.5 times ratio of Facebook, Reuters reported.
“The first quarter was a strong start to the year,” said Jack Dorsey, Twitter CEO. “We grew our audience and engagement, marking another quarter of double-digit year-over-year DAU growth, and continued our work to make it easier to follow topics, interests, and events on Twitter. We also introduced a new framework to think more cohesively about the issues affecting our service, including information quality and safety. This holistic approach will help us more effectively address these challenges by viewing them through the broader lens of the health of the public conversation, and we’re encouraged by our initial progress in this area,” Jack Dorsey added. (Twitter said in an SEC filing)