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Twitter (TWTR) Q1 Earnings Beat Estimates, Ad Revenues Rise

·3 min read

Twitter TWTR reported first-quarter 2022 adjusted earnings of 90 cents per share, which increased 462.5% year over year and beat the Zacks Consensus Estimate by 125%.

Revenues increased 16% year over year to $1.20 billion but lagged the Zacks Consensus Estimate by 0.99%.

Advertising revenues increased 23% year over year to $1.11 billion. Subscription and other revenue reached $94 million, down 31% year over year or 5% year over year when excluding MoPub from the year-ago period

User Details

Average monetizable daily active users (mDAU) rose 15.9% year over year and 5.5% sequentially, to 229 million.

The average U.S. mDAU was 39 million, up 6.4% on a year-over-year basis and 4.2% quarter-over-quarter basis. The average international mDAU was 189.4 million, rising 18.1% year over year and 5.6% sequentially.

Twitter, Inc. Price, Consensus and EPS Surprise

Twitter, Inc. Price, Consensus and EPS Surprise
Twitter, Inc. Price, Consensus and EPS Surprise

Twitter, Inc. price-consensus-eps-surprise-chart | Twitter, Inc. Quote

Operating Details

Twitter’s total costs and expenses were $1.33 billion, up 35% on a year-over-year basis, driven by higher sales-related expenses, headcount growth, infrastructure costs and marketing costs.

Research and development expenses jumped 48.3% to $372 million, primarily due to higher personnel-related costs.

Sales and marketing expenses increased 37.8% to $299.8 million, primarily due to higher marketing expenses, personnel-related costs and sales commissions.

General and administrative expenses surged 27.5% year over year to $149.9 million, primarily due to higher personnel-related costs and professional fees.

Adjusted EBITDA increased 301.3% year over year to $1.18 billion.

Twitter reported an operating income of $128 million compared with $52 million reported in the year-ago quarter.

Balance Sheet

As of Mar 31, 2022, Twitter had $6.26 billion in cash, cash equivalents and short-term investments. The company had $6.39 billion in cash, cash equivalents and short-term investments as of Dec 31, 2021.

Net cash from operating activities in the reported quarter was $126 million against net cash used in operating activities of $528 million in the previous quarter.

In the first quarter, adjusted free cash outflow was $35 million compared with free cash outflow of $667 million in the previous quarter.

The company repurchased $2.08 million of stock during the first quarter, bringing the total repurchase amount to $3.26 billion to date.

Post Quarter Development

On Apr 25, Twitter entered into a definitive agreement to be acquired by an entity wholly owned by Elon Musk for $54.20 per share in cash.

With the completion of the transaction, which is expected close in 2022, Twitter will become a privately-held company.

Zacks Rank & Stock to Consider

Currently, Twitter has a Zacks Rank #4 (Sell).

Twitter shares are up 12.5% in the year-to-date period, underperforming the Zacks Computer & Technology sector’s decline of 23.3%.

Cogent Communications CCOI, BWX Technologies BWXT and Analog Devices ADI are some stocks that investors can consider from the broader sector. All the three stocks sport a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cogent Communications shares have underperformed the sector in the year-to-date period, declining 13.6%. The company is scheduled to release first-quarter 2022 results on May 5.

BWX Technologies shares have underperformed the sector in the year-to-date period, declining 9.3%. The company is set to announce first-quarter 2022 results on May 9.

Analog Devices shares have underperformed the sector in the year-to-date period, declining 11.1%. The company is set to announce second-quarter 2022 results on May 18.


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