Twitter shares soar on unexpectedly strong user growth
Twitter’s blue bird is flapping its wings again — but can it make enough money to leave the nest?
The micro-blogging network is suddenly growing its user base again, after a blistering 2016 in which advertisers fled to rivals as it tried and failed to sell itself to potential buyers including Disney.
Chief Executive Jack Dorsey, who’s been busy booting bullies from the service, managed to add a stunning nine million monthly active users in its first quarter — a 6-percent increase that brought the total to 328 million.
Still, the 40-year-old tech exec gave a ho-hum outlook for the rest of the year.
“Right now, sitting here today, we don’t see an improvement in our growth rate in revenue,” Dorsey warned analysts on a Wednesday conference call, forecasting more ‘negative impacts’ from discontinued products. In April, Twitter lost the rights to stream NFL Thursday night games to Amazon.
On the positive side, political dustups, sporting events and music concerts helped Twitter add users.
Twitter has long insisted that President Trump has had little to no effect on its traffic. But operating chief Anthony Noto finally changed his tune on a Wednesday conference call with analysts.
“We benefited from our new and resurrected users following more news and political accounts in Q1, particularly in the US,” Noto said.
In January, Mexican president Enrique Pena Nieto informed the White House it wouldn’t be attending a planned meeting on NAFTA, conveying the news via Twitter.
Elsewhere, Twitter touted the success of streaming the PBS broadcast of Trump’s address to Congress along with a Depeche Mode concert, Grammy red carpet and NHL sports events among other things.
The stock popped more than 10 percent in early afternoon trades, recently changing hands at $16.01.
“The fake news is that Twitter is losing usage, BTIG analyst Richard Greenfield told The Post. “Twitter is not dying. They are growing users, the advertisers are going to come back.”
Other analysts were more cautious, as Twitter’s newfound user growth isn’t yet a proven trend.
“It’s all about user growth, like Netflix,” said Nomura’s entertainment analyst, Anthony DiClemente. “The holy grail would be if revenue could catch up to user growth. We’re still not seeing that happen yet.”
Twitter will be presenting its rosiest story to Madison Avenue on Monday as part of the New Front presentations.
Noto said Twitter has some 100,000 advertisers, whose ranks have plummeted 60 percent over the past year.
“Generally advertisers move faster than you would want them as it relates to not spending, the opposite of getting them to spend more,” Noto said.
Twitter will spend more on marketing and adding staff in the second quarter, he added. Stock based compensation fell in the period, versus a year ago another positive for the shares.
RBC’s Mark Mahaney told investors to beware.
“The ever-present negative is fierce competition for online ad dollars from Facebook and Google — and potentially SNAP. Whether Twitter can break out of the Experimental Budget Zone [for advertisers] is unknown.”
First quarter revenue was $548 million, down 8 percent year-over-year, but ahead of the Street’s forecast of $517 million.
Twitter’s net loss was $62 million, or 9 cents a share, but excluding items, Twitter earned 11 cents a share versus Street forecasts of just one penny.