Twitter earnings call Q4 2015 – increasing revenues from a static user base

I’ve been looking froward to this quarter’s earnings call from Twitter. It’s a real opportunity for them to remind investors what a great platform Twitter can be.

I was really tracking 4 things from tonight’s call:

My twitter earnings call wishlist

So how did they do?

  • Well. revenue hit $710m so that’s slightly over expectation and growth of 48% YoY
  • Monthly Active Users grew 9% YoY to 320m, but that’s flat QoQ…ouch. What’s worse, it was confirmed on the call that this number stuck through January as well.
  • A loss of $90m, so pretty good there too.
  • As for a product surprise, we didn’t receive anything really exciting. However, they teased some positive results from testing ads for logged out users and the First View ad product unveiled yesterday.

To summarise, they delivered impressive growth by increasing ad revenues, not users.

Other takeaways from the call:

  • Twitter is live“Twitter is live” was one of the leading quotes from Jack Dorsey. He sees the real strength of the platform being the speed of the service versus other social networks.
  • Jack also discussed the need for an agile management team and touched on the recent changes to the senior management. He faced further questioning on this later in the call as investors are keen to know how stable the leadership team is.
  • Investors asked if the company would start sharing engagement metrics as a measure of improved quality of interaction despite the flat user base. They also called out how tweets down versus last year on the Superbowl.
  • The Leadership team was at pains to point out the long-term strategy for the business and this is anchored around five key themes (are they using OKRs?) which I’d summarise as usability improvements (what Jack called “broken windows”), focus on live streaming video, speed of communication (“twitter is live”), the safety of the platform, and investing in developers.

So, what did investors think?

They seem un-moved so far after he Twitter earnings call.

TWTR share price post earnings call


DISCLAIMER: I hold some TWTR stock

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