Twitter said it expects to miss first quarter 2020 financial expectations because of the COVID-19 pandemic, although the company also said the crisis has significantly expanded its average daily user base — with a net gain of 12 million so far in the current period.
Reduced expenses resulting from the COVID-19 disruption are “unlikely to fully offset the revenue impact of the pandemic in Q1,” the company said Monday. The outbreak “has impacted Twitter’s advertising revenue globally more significantly in the last few weeks,” CFO Ned Segal said in a statement.
The social network said it currently expects Q1 revenue to be “down slightly” from the year-earlier period, for which Twitter reported sales of $787 million. Twitter also expects to report an operating loss for the current quarter. Previously, Twitter had provided Q1 guidance of revenue between $825 million and $885 million, and operating income of between “$0 million and $30 million” (vs. $93.7 million in the year-ago quarter).
At the same time, the COVID-19 outbreak and ongoing product improvements have boosted Twitter’s overall monetizable daily active users: According to the company, year to date average total monetizable DAUs are approximately 164 million, up 23% from 134 million in Q1 2019 and an increase of 8% from 152 million in Q4 2019.
In the current quarter, “We’re seeing a meaningful increase in people using Twitter, and our teams are demonstrating incredible resilience adapting to this unprecedented environment,” Twitter CEO Jack Dorsey said in a statement. “We’ll continue to navigate this environment focusing on supporting our employees, customers, and partners, while strengthening our service for everyone around the world and adjusting to a new operating and economic environment.”
Twitter had a strong start to the year before the effects of COVID-19 “began spreading more broadly,” Segal said, citing success from Super Bowl LIV and overall strength in the U.S.
The company is scheduled to report Q1 2020 earnings on April 30 before the market opens.