Twitter shares fall as it warns of fizzling user growth, rising costs
Twitter Inc shares sank on Thursday as it reported a surge in ad sales but warned of rising costs and expenses and said user growth could slow in the coming quarters as the flow seen during the coronavirus pandemic fizzles.
The social media company also said stock based compensation for new hires would be more than expected this year.
Shares of Twitter fell 8.7% to $59.30 in trading after the bell.
Twitter says it wants to reset after years of product stagnation, announcing in February bold goals to expand its user base, speed up new features for users, and double its revenue by 2023.
Ad revenue for the first quarter were $899 million, up 32% from the same period a year ago and beating analyst estimates of $890 million, according to IBES data from Refinitiv. Total revenue for the quarter was $1.04 billion, up 28% year-over-year and slightly higher than estimates of $1.03 billion.
The San Francisco-based company reported 199 million daily active users, up 20% year-over-year, compared to analysts’ estimates of 200 million, according to FactSet data.
Twitter repeated its warning that growth of its monetizable daily active users (mDAU) – its term for daily users who can view ads – could reach “low double digits” in the next quarters, likely hitting a low point in Q2.
