Twitter says projected total revenue to grow faster than costs

Twitter has posted 27% user growth, missing Wall Street estimates, and warned this rate would slow in the upcoming quarters as a boost from the pandemic fizzles, according to Reuters.

Twitter shares were mostly flat in volatile trading after the market closed.

The social media company, which beat quarterly sales and profit estimates, said expenses would rise 25% or more in 2021 but projected that total revenue would grow faster than costs, Reuters reported.

In the fourth quarter, Twitter said it had 192 million average monetizable daily active users (mDAU) — its term for the number of daily users who can view ads. Analysts were expecting 196.5 million, according to IBES data from Refinitiv.

Twitter said user growth was driven by product improvements and more global conversation from events like the COVID-19 pandemic and the US election.

In a letter to shareholders, Twitter said the significant pandemic-related surge in users last year created challenges for future gains.

Twitter’s advertising business benefitted from new ad formats and improved targeting, Chief Financial Officer Ned Segal said in the earnings release reported by Reuters.

Total revenue came in at a record $1.29 billion, an increase of 28% year over year. Ad revenue was $1.15 billion, up 31% from the same period a year ago.