Twitter 2014 revenues double but user growth declines
What: Although it had a US $132 million net loss, Twitter revenues in 2014 first quarter were of US $250 million , almost doubling last year´s figure.
Why it matters: Growth was mainly fueled by a substantial increase in dvertising revenue. The bad news is that the user growth rate declined. Twitter's stock tanked by 10% after the earnings announcement.
Twitter released its first quarter financial results, revealing a US $132 million net loss, or 23 cents per share.The good news is that Q1 revenues increased to US $250 million, up 119% year-over-year, doubling 2013 revenues of US $ 114.3 million and beating most of Wall Street analysts´ expectations. This growth was mainly fueled by an increase in advertising revenue, which totaled US $226 million during the first quarter, a 125% year-over-year increase. Mobile advertising revenue accounted for approximately 80% of total advertising revenue.Data licensing and other revenue totaled US $24 million, an increase of 76% year-over-year.Regarding International revenue,which represents at least 28% of total revenue, the number totaled US $70 million, an increase of 183% year-over-year.
Sluggish user growth?
Despite the revenue growth, Twitter sluggish user growth ended up attracting the most attention, as it is a lingering concern among Wall Street investors and tech observers. Twitter's stock fell nearly 10 percent after the figures went public.In its second earnings statement as a public company, Twitter reported 255 million monthly active users, up from 241 million from the last quarter but falling short of analysts' projections of 257 million. The San Francisco-based digital platform's user base grew by 25 percent in Q1 compared to the same period in 2013. That's down from a 30 percent year-over-year increase in Q4 '13 and a 39 percent YOY increase in Q3 over their respective prior-year quarters.
Timeline views measure how often users refresh their own Twitter account or someone else’s. These measurement reached US $ 157 billion for the first quarter of 2014, an increase of 15% year-over-year.Advertising revenue per thousand timeline views, reached US $1.44 in the first quarter, doubling last year´s figure.
Monthly active users grew to 255 million in the first quarter, including re-acceleration in twitter´s largest market, the U.S., which added 3 million net new users. Mobile active users reached 198 million in the same period, an increase of 31% year-over-year, representing 78% of total MAUs.
The company has so far launched improved tools for advertisers, allowing them to create tailored audiences from email lists and CRM databases, target TV conversations for Spanish-language television, and connect with users through Promoted Accounts in search.
"Content creators, publishers and marketers care about 2 things: scale and engagement, and our platform increasingly delivers both of those," said Dick Costolo, CEO of Twitter.
"We had a very strong first quarter. Revenue growth accelerated on a year over year basis fueled by increased engagement and user growth.We also continue to rapidly increase our reach and scale. With the integration of MoPub, we now reach more than 1 billion iOS and Android users each month, making us one of the largest in-app mobile ad exchanges in the world and the only one at scale to offer native in-app advertising,"he added.
Twitter's outlook for the second quarter of 2014 ,projects a revenue ranging between US $270 million to US $280 million, with an adjusted EBITDA of US $25 million to US $30 million.
For the full year, the company expects US $1,2million to US $1,25 million, with Adjusted EBITDA of US $180 million to US $205 million. However, analysts’ forecast a US $1.24 billion revenue.