Morning Report: Twitter’s earnings dropped yesterday, but we didn’t get a chance to go over them together. So here’s what you need to know about the company’s quarter, especially as Snap’s earnings loom.
Shares of Twitter have risen since the company reported its earnings yesterday, which included revenue gains, strong profitability, and some positive user growth metrics.
The social company reported $655 million in revenue, far above a forecasted $608 million. From that better-than-expected revenue result, Twitter earned an adjusted $0.16 per share, a full third greater than its anticipated $0.12 result.
The firm also bested monthly active user results, with CNBC reporting that the firm’s 336 million reported MAUs was above the “334.2 million expected by StreetAccount and FactSet.” And, according to Twitter’s earnings report, its daily active user figure rose 10 percent compared to the year-ago quarter. The firm did not provide a hard metric for that result. (Twitter’s MAU count grew 3 percent year-over-year).
But most fun in Twitter’s earnings report was the fact that it generated unadjusted profit as well as adjusted profit. Indeed, from its own disclosure:
The company reported first quarter revenue of $665 million, an increase of 21% year-over-year. Quarterly GAAP net income was $61 million, representing a GAAP net margin of 9% and GAAP diluted EPS of $0.08. This compares with a quarterly GAAP net loss of $62 million, a GAAP net margin of (11%) and GAAP diluted EPS of ($0.09) for the same period last year.
Twitter managed to swing its GAAP net income over $120 million in a year. That’s impressive.
So Twitter grew more quickly than expected, generated more profit than expected, grew its global monthly audience some, and grew its daily active audience more. That’s a happy place to be for a social company.
The markets seem to agree Twitter is now worth $23.94 billion as of the time of writing or $31.09 per share. That’s more than double its summer, 2016 lows when the firm was worth less than $15 per share.
Here we can turn our attention to Snap, which reports earnings on the first of May. Snap has had a bad week, with its shares falling after it was reported that the firm’s (seemingly unpopular) redesign is undertaking a redesign of its own. Today Snap shares are up, but if that’s due to it return to the hardware market isn’t clear. (That effort didn’t go well the first time.)
Regardless, Snap is expected to report $243.55 million in revenue and a loss of $0.17 per share (presumably adjusted). What will be interesting to see is how Snap’s value (currently far below Twitter’s) reacts to its impending result. Snap will post higher revenue growth (Twitter grew 21 percent year-over-year), but from a smaller base and with huge losses.
Snap’s earnings will, therefore, show us how much a premium growth is worth in the social space, at least in contrast to profits. More when Snap reports.
From The Crunchbase Daily:
Digital banking startup Revolut has raised $250 million in a Series C round led by DST Global. The financing values the three-year-old, London-based startup at $1.7 billion.
Yet another big IPO could hit the market this summer. The Wall Street Journal is reporting that wireless speaker maker Sonos is preparing for an IPO in June or July that would likely value the Santa Barbara, Calif.-based company at between $2.5 billion and $3 billion.
Seed investor 500 Startups is raising its first growth-stage fund for its Southeast Asia program 500 Durians. The fundraising follows an active investment spree for Singapore-based Durians, which has backed over 160 companies to date.
Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.