generic Twitter (TWTR) Q4 Earnings Meet Estimates, Revenues Miss
Twitter TWTR reported fourth-quarter 2021 adjusted earnings of 33 cents per share, which decreased 13.2% year over year and were in line with the Zacks Consensus Estimate.
Revenues increased 22% year over year to $1.57 billion but lagged the Zacks Consensus Estimate by 0.15%.
Advertising revenues increased 22% year over year to $1.41 billion. U.S. advertising revenues totaled $784.7 million, up 21% year over year. International ad revenues increased 24% year over year to $628.3 million.
Total ad engagements decreased 12% due to a mix shift toward lower funnel ad formats and 15-second video views, which have higher cost per engagement (“CPE”) but lower engagement rates.
CPE increased 39%, primarily driven by like-for-like price increases across most ad formats.
Twitter, Inc. Price
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Data licensing and other revenues increased 15% from the year-ago quarter to $154.3 million. Twitter completed the divestiture of MoPub in the reported quarter. Beginning first-quarter 2022, the company will update the name of Data licensing and other revenue to Subscription and other revenue.
U.S. revenues (56% of revenues) increased 21% year over year to $884.6 million. International revenues (44% of revenues) increased 23% to $682.6 million.
Japan remained the company’s second-largest market in the reported quarter. Revenues from the country increased 10% year over year to $194 million.
User Details
Average monetizable daily active users (mDAU) grew 13% year over year and 3% sequentially, to 217 million.
Average U.S. mDAU was 38 million, up 2% both on a year-over-year and quarter-over-quarter basis. Average international mDAU was 179 million, rising 15% year over year and 3% sequentially.
Operating Details
Twitter’s total costs and expenses were $1.40 billion, up 35% on a year-over-year basis, driven by higher sales-related expenses, headcount growth, infrastructure costs and marketing costs.
Research and development expenses jumped 50% to $372 million, primarily due to higher personnel-related costs.
Sales and marketing expenses increased 39% to $338 million, primarily due to higher marketing expenses, personnel-related costs and sales commissions.
General and administrative expenses surged 55% year over year to $174 million, primarily due to higher personnel-related costs and professional fees.
Adjusted EBITDA decreased 3.8% year over year to $489.4 million.
Twitter reported operating income of $167 million compared with $252 million reported in the year-ago quarter.
Balance Sheet
As of Dec 31, 2021, Twitter had $6.39 billion in cash, cash equivalents and marketable securities. The company had $7.41 billion in cash, cash equivalents and marketable securities as of Sep 30, 2021.
Net cash used in operating activities in the reported quarter was $528 million against net cash from operating activities of $389 million in the previous quarter.
In the fourth quarter, adjusted free cash outflow was $667 million compared with free cash flow of $20 million in the previous quarter.
The company repurchased $266 million of stock during the fourth quarter, bringing the total repurchase amount to $1.18 billion to date.
Outlook
For the first quarter of 2022, Twitter expects total revenues between $1.17 billion and $1.27 billion. GAAP operating loss is expected between $225 million and $175 million.
For 2022, Twitter expects capital expenditures between $900 million and $950 million.
Zacks Rank & Stock to Consider
Currently, Twitter has a Zacks Rank #5 (Strong Sell).
Twitter shares are down 44.2% in the past year, underperforming the Zacks Computer & Technology sector’s rise of 4.5%.
Airbnb ABNB, Vocera Communications VCRA and Photronics PLAB are some stocks that investors can consider from the broader sector. All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Airbnb’s shares have underperformed the sector in the past year, declining 19.9%.
Airbnb is set to report fourth-quarter 2021 results on Feb 15.
Vocera’s shares have outperformed the Zacks Computer & Technology sector in the past year, surging 82.6%.
VCRA is set to report fourth-quarter 2021 on Feb 10.
Photronics’ shares have outperformed the Zacks Computer & Technology sector in the past year, rising 50%.
PLAB is set to report first-quarter fiscal 2022 results on Feb 23.
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