Why Twitter Stock Fell Today

These two things may have spooked some investors.

Daniel Sparks
Daniel Sparks
Feb 7, 2019 at 10:57AM
Technology and Telecom

What happened

Shares of social network Twitter (NYSE:TWTR) declined on Thursday, falling as much as 10.9%. As of 10:20 a.m. EST, the stock was down 10.1%.

The stock's decline follows Twitter's fourth-quarter results, which featured strong revenue and earnings-per-share growth but weaker-than-expected revenue guidance. That and an announcement that the company will no longer disclose monthly active users after the first quarter of 2019 may be worrying some investors.

A woman looking at her smartphone while drinking coffee.

Image source: Getty Images.

So what

Twitter reported fourth-quarter revenue of $909 million, up 24% year over year or 26% in constant currency. Non-GAAP earnings per share rose from $0.19 in the year-ago quarter to $0.31.

For its first quarter of 2019, management said it expects revenue between $715 million and $775 million. On average, analysts expected first-quarter revenue of $763 million -- above the midpoint of management's guidance range.

Check out the latest Twitter earnings call transcript.

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Now what

Looking ahead, Twitter said it will stop reporting its monthly active user (MAU) metric after the first quarter of 2019. Instead, the company will disclose average monetizable daily active users (DAU) -- both in absolute numbers and in terms of year-over-year growth.

The change comes as monthly active users are declining, likely prompting some investors to worry that the reporting foreshadows more troubles to come for the metric. Monthly active users declined by nine million year over year and five million sequentially to 321 million.