The number of average monetizable daily active users grew 21% year-over-year to 152 million in the fourth quarter. In the US, their number increased by 15% to 31 million. Analysts had predicted a lower number. The user base expanded mainly due to product improvements and the use of technology, including machine learning, to enhance user experience.
The top-line benefited from an increase in advertising, the company’s main revenue source, and rose by 11% to $1.01 billion. It was slightly above the consensus estimate. Revenues increased in all the geographical segments.
Earnings Fall
Earnings, on an adjusted basis, dropped to $0.25 per share from $0.31 per share last year and missed the Street view. Net income, including special items, was $118.77 million or $0.15 per share in the three-month period, compared to $255.3 million or $0.33 per share a year earlier. The bottom-line was negatively impacted by a 22% increase in costs and expenses.
“Entering 2020, we are building on our momentum — learning faster, prioritizing better, shipping more and hiring remarkable talent. All of which put us in a stronger position as we address the challenges and opportunities ahead,” said CEO Jack Dorsey.
Outlook
For the first quarter, the management expects total revenues to be in the range of $825 million to $885 million and operating income to be around $30 million. For the whole of 2020, the company forecasts stock-based compensation expense to be between $425 million and $475 million. Full-year capital expenditure is expected to be in the $775-$825 million range.
Ad Server
Twitter said it is on track to complete the rebuilding of its ad server in the first half of 2020. A key development in the fourth quarter was the launch of Twitter Privacy Center, with the aim of providing more clarity on the use of information shared on the platform.
Related: Twitter Q3 2019 Earnings Conference Call Transcript
Twitter shares suffered a massive loss after its dismal third-quarter report and remained low since then. The stock, which has been on the recovery path since the beginning of 2020, made strong gains during Thursday’s pre-market trading session.