Twitter reported its earnings for the fourth quarter of 2020 and beat both earnings per share and revenue estimates, posting a record $1.29 billion in revenue.
The news might be unexpected for some, given that after shutting down Trump’s 89-million-follower account permanently last month following the Capitol insurrection, Twitter’s stock price dropped by 12%, erasing $5 billion from its market capitalization.
The company reported year-over-year total revenue growth of 28% to $1.29 billion and earnings per share of $0.38, compared to a consensus EPS estimate of $0.31 and a consensus revenue estimate of $1.19 billion, according to Seeking Alpha.
“2020 was an extraordinary year for Twitter. We are more proud than ever to serve the public conversation, especially in these unprecedented times,” Jack Dorsey, Twitter’s CEO said in the earnings statement. “Our product changes to date are promoting healthier conversations for those who use our service, including advertisers and partners, and we are excited about our plans to continue innovating in 2021.”
— The Market Oracle (@MarketsOracle) February 9, 2021
Ned Segal, Twitter’s CFO, added that the company “delivered record revenue of $1.29 billion in Q4, up 28% year over year, reflecting better-than-expected performance across all major products and geographies.”
Total US revenue was $733 million, an increase of 24%. Total international revenue was $556 million, an increase of 34%, and revenue from Japan, the company’s second largest market, increased 26% to $176 million or 14% of total revenue.
In addition, total advertising revenue was $1.15 billion, an increase of 31%, while data licensing and other revenue totaled $134 million, an increase of 9%. The company says in a letter to shareholders that advertising revenue was mostly driven by strong brand advertiser demand in the US for most of the quarter.
“We saw a dip in US advertiser spend during a short period bracketing the US presidential election on November 3, followed by a strong resumption in demand that continued through the holidays,” according to the letter.
Twitter Revenue Hits Record High
The company also noted that in 2020, growth from product improvements reached an all-time high, with additional benefit from “increased global conversation around COVID-19, the run-up to US elections, and other current events.”
Twitter Q4 earnings are out:
* Revenue was better than expected, and was $1.29 billion
* User growth a little worse than expected — 192 million daily users (estimate was 193m)
* Twitter warned user growth in 2021 will be lower than 2020. Hard to compete with a pandemic year
— Jaimie Park (@PBandJaimie) February 9, 2021
“In Q4, we helped new and reactivated accounts build a more durable and sustainable connection with Twitter by using real-time signals around interest and intent to significantly improve content personalization and discovery in their first few days on Twitter,” it says.
In terms of its financial outlook for 2021, Twitter says it expects to grow headcount by more than 20% in 2021, “especially in engineering, product, design, and research.”
“Assuming the global pandemic continues to improve and that we see modest impact from the rollout of changes associated with iOS 14, we expect total revenue to grow faster than expenses in 2021. How much faster will depend on our execution on our direct response roadmap and macroeconomic factors.”
For the first quarter of 2021, the company expects total revenue to be between $940 million and $1.04 billion, according to the letter – another decent earnings report for big tech.
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This article originally appeared on GOBankingRates.com: Twitter Posts Record $1.29 Billion Revenue, Will Increase Headcount by 20% in 2021