Twitter user count underwhelms as annual loss is reported at $221 million | business news
Twitter is the latest social media giant to announce disappointing user numbers as it reports an annual loss of $221 million.
The San Francisco-based company announced that its measure of “monetizable daily active users” — those who see ads on the platform — increased by six million to 217 million over the last three months of 2021.
That fell short of Wall Street estimates that the total would reach 218.5 million.
Fourth-quarter ad revenue of $1.41 billion also fell short of analysts’ target of $1.43 billion, and Twitter’s guidance for first-quarter revenue was also slightly below average.
But Twitter cheered investors by launching a $4 billion share buyback program.
The quarterly results are the first since Parag Agrawal took over as chief executive from Twitter’s co-founder Jack Dorsey in November.
They follow a disappointing string of numbers from Meta – the owner of Facebook, Instagram and WhatsApp – last week that prompted Metas share price collapse by a quarter.
Those results had revealed the first decline in user numbers in Facebook’s 18-year history, as well as a drop in ad revenue and pressure from social media competitors like TikTok.
With a market value of $30 billion, Twitter is relatively small compared to Meta, which is worth more than $600 billion. Meta’s Facebook platform has more than 1.9 billion daily users.
But like larger tech stocks, Twitter has taken its share price under pressure of late as investors worry about the prospect of US interest rate hikes making bets on future returns from growing companies less appealing.
Twitter’s stock is down 12% so far this year.
In its latest results, the company said it made “significant progress” towards its goal of reaching 315 million users and $7.5 billion in annual revenue by the end of 2023.
User growth should accelerate this year in the US and internationally.
Twitter has been pursuing projects like audio chat rooms and newsletters to attract users and advertisers, but analysts had expected quicker signs of progress.
It needs to double its growth rate to 12 million users per quarter if it is to meet its 2023 goal.
Mr Agrawal said: “I see a strong urgency to improve our focus and execution, but also a lot of confidence in our strategy and our team.”
The plan will apparently involve a big squandering of bonuses.
Stock-based compensation of $630 million in 2021 increased from $475 million last year and is expected to increase to between $900 million and $925 million this year.
Twitter’s annual revenue of $5.08 billion was up 37% from 2020 and is expected to grow in the “low-to-mid range of 20%” this year.
The full-year 2021 loss came with a $766 million charge resulting from a settlement of a lawsuit alleging it misled investors.