Twitter shares soar after reporting strong user numbers and miss on earnings

Twitter reported earnings for its fourth quarter of 2019 Thursday that missed analyst estimates for earnings per share but beat revenue and active user expectations.

The stock was up as much as 4% during premarket trading but turned relatively flat shortly after.

Here are the key numbers Twitter reported:

• Earnings per share: 25 cents per share vs. 29 cents expected, according to Refinitiv consensus estimate
• Revenue: $1.01 billion vs. $996.7 million expected, according to Refinitv
• Monetizable Daily Active Users (mDAUs): 152 million vs. 147.5 million total expected, according to FactSet and StreetAccount

Twitter said it experienced the fastest quarterly growth of mDAUs and the metric reached its highest level in Q4. This is only the third time Twitter has reported mDAUs alone, rather the industry standard monthly active users (MAUs) it previously reported. Twitter says mDAUs are not comparable to similar metrics from other companies, which it says are more expansive. Its new figure measures “Twitter users who log in and access Twitter on any given day through Twitter.com or our Twitter applications that are able to show ads,” according to the company.

Twitter provided Q1 revenue guidance on the lighter end of expectations, between $825 million and $885 million compared with the Thomson Reuters consensus estimate of $873 million.

Twitter said it expects stock-based compensation expenses for fiscal year 2020 to fall between $425 million and $475 million and capital expenditures to fall between $775 million and $825 million. The company plans to build a new data center and grow headcount by 20% during the year.

Last quarter, Twitter reported “a number of headwinds” that contributed to its revenue shortfall, sending the stock down more than 20%. Twitter found several issues with its Mobile Application Promotion (MAP) product that it said hurt its ability to target ads and share measurement data with partners.

Executives warned shareholders that the headwinds would continue to be reflected for the entirety of the fourth quarter and will “continue to weigh on the overall performance of our advertising business in the near term.” CFO Ned Segal said the effects could even “bleed over” into 2020.

Twitter has remained focus on initiatives that make the platform safe and accessible for users. On Tuesday it released a new policy to tackle deepfakes and other forms of synthetic or manipulated media. Twitter said in its announcement that it prioritizes limiting potential serious harm that could stem from user-posted content.

The policy came as Twitter and other social media companies are seeking to firm up their platforms and policies ahead of the 2020 U.S. presidential election. The company is now allowing users an option to report content specifically for including misleading information about how to participate in an election.

Twitter also made the bold decision to eliminate political ads altogether, a more sweeping approach than other digital ad providers. CEO Jack Dorsey said on Twitter in October that it would be “not credible” for Twitter to tell users it’s committed to halting the spread of misinformation while allowing advertisers to pay the company to target users with political ads.

—CNBC’s Sara Salinas contributed to this report.

This story is developing. Please check back for updates.

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