Shares of Twitter are at new lows in the after-hours session, following yet another quarter of hemorrhaging money and missing expectations. The stock is down 75% over the past two years. It’s worth noting, however, Frederick Wilson sold most of his holdings near the highs. God bless the venture capital community for thrusting this piece of offal, headlong, into our lives.
Via Briefing.com
Twitter (TWTR) will report Q4 results tonight after the close with a conference call to follow at 5pm ET. TWTR reported Q3 results at 4:10pm. Current Capital IQ consensus stands at EPS of $0.12 on Revenue of $710 mln.
Shares of TWTR have been under steady selling pressure since hitting $55 last April. The slide has led the stock to all time lows as it trades in the $14 area ahead of tonight’s report. A lack of growth in its user base has been a key in driving the stock lower. People are questioning TWTR’s viability compared to it’s primary social media peer Facebook (FB) which continues to grow at a faster rate despite a user base that is 5x the size. TWTR has also had issues with it’s top management as there were four notable departures. A concern for investors as the co is in the midst of a turnaround plan.
The combined issues have led to sentiment dropping to an all time low. Investors would like to see signs that the turnaround is starting to show some rewards despite the departures. And perhaps most importantly investors would like to see a stabilization of the user base.
Key Metrics
- Monthly Active Users- Q3 Total average MAUs were 320 mln, up 11% y/y, and compared to 316 million in the previous quarter (Current expectations are 324 mln). Excluding SMS Fast Followers, MAUs were 307 million for the third quarter, up 8% y/y, and compared to 304 million in the previous quarter. (4Q15 was 292 mln)
- Q3 Mobile MAUs represented approximately 80% of total MAUs.
- Q3 Advertising revenue totaled $513 million, an increase of 60% y/y.
- Q3 Mobile advertising revenue was 86% of total advertising revenue.
- Q3 Data licensing and other revenue totaled $56 million, an increase of 37% y/y.
Guidance
- TWTR issued downside guidance for Q4, projecting revenue in the range of $695-710 mln vs. then-$741.70 mln Capital IQ Consensus Estimate.
- Q4 Adjusted EBITDA is projected to be in the range of $155-175 mln.
- GAAP expenses are projected to include the vast majority of the $5-15 mln of total restructuring charges expected from corporate restructuring activities. These charges are projected to be $10-20 mln. The majority of corporate restructuring charges will be in Q4 (this is excluded from Q4 EBITDA guidance).
- Capital expenditures are projected to be no more than $110 million.
- TWTR is expected to guide for Q1 and FY16
- Q1 Capital IQ consensus- EPS $0.08, Revenue $629 mln.
- FY16 Capital IQ consensus $0.54, Revenue $3.093 bln.
Q3 Recap
TWTR reported Q3 (Sep) earnings of $0.10 per share, $0.05 better than the Capital IQ Consensus of $0.05. Revenues rose 57.6% year/year to $569 mln vs the $562.17 mln Capital IQ Consensus.
- Revenue Breakdown
- Advertising revenue totaled $513 million, an increase of 60% y/y (Q2 +63%)
- Mobile advertising revenue was 86% of total advertising revenue.
- Data licensing and other revenue totaled $56 million, an increase of 37% y/y (Q2 +44% y/y)
- U.S. revenue totaled $370 million, an increase of 54% y/y (Q2 +53% y/y)
- International revenue totaled $199 million, an increase of 65% y/y (Q2 +78% y/y).
Executive Departures
- The four executives were Alex Roetter and Kevin Weil, who have run all of the product and engineering together the last eighteen months, according to Dorsey, Katie Stanton, who led the media team, and Skip Schipper, who was vice president of human resources
New Board Members?
- According to sources TWTR may name two new Board members with its release. One candidate getting strong scrutiny has been a top exec at a major media company, while the other is considered a powerful creative player within Hollywood.
I’m sure this stock is a buy at some point. But the company is truly doing a miserable job at monetizing an incredibly valuable platform.
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