Please ensure Javascript is enabled for purposes of website accessibility

Twitter Withdraws Guidance, Citing Coronavirus

By Rich Smith - Mar 24, 2020 at 1:40PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Traffic on Twitter has never been stronger, but it won't make Twitter profitable in Q1.

Reporting earnings two months ago, social media network Twitter (TWTR -1.08%) reported its first-ever quarter with $1 billion in revenue. CEO Jack Dorsey promised to "build[] on our momentum," growing Twitter's headcount by 20% in 2020. The company predicted a sequential drop in Q1 revenues, however, to somewhere between $825 million and $885 million, with operating profits of as much as $30 million -- or as little as nothing.

Now, even those promises are gone.

Twitter's blue bird icon

Image source: Twitter.

Late Monday, Twitter announced that it is "withdrawing its revenue and operating income guidance for the first quarter of 2020, as well as its outlook for expenses, stock-based compensation, headcount, and capital expenditures for the full year due to the growing impact of COVID-19 on the global operating and economic environment and their effect on advertiser demand."

Coronavirus, it seems, has changed everything. 

Instead of the specifics given two months ago, Twitter is now only able to say that it "expects Q1 revenue to be down slightly on a year-over-year basis [and] to incur a GAAP operating loss."

Explaining its decision to withdraw guidance, Twitter said "the near-term financial impact of this pandemic is rapidly evolving and difficult to measure, based on current visibility." The good news is that "COVID-19 disruption" has "reduced expenses" at Twitter. The bad news is that this is "unlikely to fully offset the revenue impact of the pandemic in Q1."

If there's a silver lining for Twitter, it's that the coming of Coronavirus and self-quarantine has made its service more relevant than ever. Dorsey commented: "Twitter's purpose is to serve the public conversation, and in these trying times our work has never been more critical."

And as users flock to Twitter, total monetizable DAU (mDAU) is up 23% year over year, "quarter-to-date" at "approximately 164 million."

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Twitter, Inc. Stock Quote
Twitter, Inc.
TWTR
$37.39 (-1.08%) $0.41

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
317%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.