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Twitter Stock (TWTR) still up despite pandemic
Twitter is a social networking service that enables users to communicate and interact through "tweets." People can also communicate privately through chats, just like FAANG's Facebook (FB) so they are in competition.
Generally, Twitter's income comes from selling ads to businesses. The company is further trying to develop it into a central hub for live updates such as sports, entertainment and news. The more users engage in tweets and conversations, the higher the traffic on the app / website, which will then increase the ad demand on Twitter, further resulting to company sales and ad price increase.
For the Q1 earnings report, the company reflected a revenue of $1.04 billion for the said quarter, which is 28% higher compared to 2020's Q1 earnings of $808 million. Twitter's guidance expected a revenue of $980 million on Q1 and $1.08 billion on Q2, which means they have done better, though the user growth fell shy from expectations.
It grew from 7 million last Q4 of 2020 to 199 million, but still short from the expected 200 million. In addition to this, Twitter declared that their ad revenue went up by 32% compared to last year, which now amounts to $899 million, with the ad engagement improving by 11% vs last year's Q1.
Though Twitter showed improvement on the revenue, with earnings recorded at 16 cents per share, the stock value has dropped down by more than 11% right after the 1st quarter earnings report was released by the company.
The fall can be attributed to several factors such as the investors being already numb with the outperformance of the previous companies that released their Q1 earnings report, the tech stock being in a difficult position due to the movement from growth stocks to value, or the possibility of inflation affecting the said tech stocks.
That being said, the company is actually more concerned about Apple's privacy changes, and has announced that it's too early to determine the exact impact of its changes. However, the company pointed out that the integration has enabled them to increase the number of iOS devices it can connect to through Mobile Application Promotion (MAP) by 30%.
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