Twitter on Thursday announced fourth-quarter advertising revenue and user growth below market expectations, while its revenue projections came in weaker than Wall Street estimated.
Still, the company said it had made “significant progress” toward its goal of reaching 315 million users and $7.5 billion in annual revenue by the end of 2023, adding that growth of users is expected to accelerate in the United States and internationally in 2022.
Twitter has been targeting big projects like audio chat rooms and newsletters to end a long-standing stagnation and attract new users and advertisers. But the quarterly results cast doubt on the company’s plan, as analysts expected faster signs of progress.
The number of monetizable daily active users, or users who see ads, rose 13% to 217 million in the fourth quarter of 2021, below analyst estimates of 218.5 million, according to Refinitiv’s IBES data. The result compares to 211 million users in the previous quarter.
Fourth-quarter advertising revenue grew 22% year-over-year to $1.41 billion, versus analysts’ projection of $1.43 billion.
The company estimates total first-quarter revenue of US$1.17 billion (almost R$6.1 billion) to US$1.27 billion (more than R$6.6 billion), but the midpoint of this range is below average Wall Street projections of $1.26 billion.
Chief Financial Officer Ned Segal said in an interview that user growth is in line with the company’s goal and that Twitter is working to increase user activity by asking people to follow topics they are interested in when signing up.
He added that advertising demand was not as strong in the final weeks of the fourth quarter as it was at the start of the holiday season.
In addition, the company said the impact of privacy policy changes on Apple devices remained modest. Last year, Apple began requiring iOS users to pass approval for apps that wanted to track their activity on other companies’ apps and websites.
Meta Platforms Inc, the parent company of Facebook, said last week that Apple’s changes had hampered advertisers’ ability to target and measure ads. Meta said this could impact its advertising business by $10 billion this year.
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