What To Expect From Twitter’s Q1 Results
Twitter (NYSE:TWTR) is scheduled to report its Q1 2017 earnings on Wednesday, April 26th. Twitter’s struggle to grow its active user base has been the primary investor concern for the past two years and its present management (led by Jack Dorsey) has not been able to assuage these concerns. This lack of user growth has continued for so long because the company has neither been able to adequately define its purpose and identity, nor make its platform easier to use. In addition, Twitter has failed to add any significant new features and hasn’t been able to adequately check abuse by trolls, driving some users to permanently leave the platform.
In the upcoming Q1 results, we expect Twitter’s management to provide more color on its strategy to tide over the aforementioned issues as well as its thoughts on the company’s declining valuation. Twitter’s stock price is down about 15% in the last year, and 10% year-to-date. We also expect management to shed light on its revenue expectations from live streaming and Periscope going forward.
Twitter expects Q1 2017 revenue of between $430 million and $560 million, against $595 million reported in the prior year quarter. It also expects adjusted EBITDA to range between $75 – $95 million, significantly lower than its Q1 2016 figure of over $180 million.
Revenue Per User
Twitter’s struggle to grow its active user base has been the primary investor concern for the past seven quarters, and that is unlikely to change in the near term. However, with the company redirecting its focus from user expansion to profit generation, the appropriate metric in focus is likely to become user engagement (DAUs/MAUs) and revenue-per-user going forward. The company’s revenue per user per month has actually been rising consistently over the last two years and currently stands at 75 cents. It will be interesting to see how this trended in Q1 2017 considering total revenue is expected to fall from the prior year quarter.
Have more questions about Twitter? Please refer to our complete analysis for Twitter
See More at Trefis | View Interactive Institutional Research (Powered by Trefis)