The social media company, led by CEO Jack Dorsey, beat Wall Street estimates on user growth and revenues.
Social media giant Twitter on Thursday reported first-quarter earnings and revenues, underpinned by taking its number of monetizable daily active users to 166 million, against a year-earlier 134 million and 152 million mDAU for the fourth quarter of 2019.
Twitter also posted advertising revenue of $682 million, up $3 million year-over-year, and overall revenue rose 3 percent to $808 million. At the same time, the company pointed to a 27 percent fall in advertising revenue from March 11-31 as the coronavirus pandemic began to bite.
The company swung to a first-quarter loss of $8.3 million, against a profit of $190.8 million in 2019.
The daily active user growth — the main metric for the company in measuring audiences — came during the coronavirus pandemic when Twitter users have been sheltering in their homes and engaging more with social media.
The San Francisco-based tech company, led by CEO Jack Dorsey, reported earnings of 11 cents per share, which beat a Wall Street forecast of 10 cents a share. Wall Street analysts had expected Twitter to post revenue of $777.8 million and 163 million daily active users at the end of the first quarter.
Shares in Twitter rose 6 percent to $32.99 in pre-market trading due to the better-than-expected results.
The social media giant had on March 23, amid the coronavirus pandemic, withdrawn its earnings forecasts and said it expected to post lower first-quarter revenue and an overall operating loss for the period. In that update, Twitter had also said that a jump in its base of active users as people sheltered in their home during the COVID-19 crisis was being offset by marketers cutting their advertising budgets.
As part of comments that accompanied its latest results on Thursday, Twitter said its advertising revenue needed to be seen in the light of both before and after the coronavirus pandemic hit. "As an indication of the rapid change in advertising behavior, from March 11 (when many events around the world began to be canceled and many in the U.S. began sheltering in place) until March 31, our total advertising revenue declined approximately 27 percent year over year," the company said. "The downturn we saw in March was particularly pronounced in the U.S., and advertising weakness in Asia began to subside as work and travel restrictions were gradually lifted."
Addressing the COVID-19 impact, Twitter said it was cutting costs and bolstering its ad products. "In light of the current operating and economic environment, we have shifted resources and priorities to increase focus on our revenue products, particularly performance ads beginning with MAP, with the goal of accelerating our long-term roadmap," the social media giant explained.
MAP, or mobile app promotion, offers varied products to allow advertisers to promote their mobile apps via Twitter.
"Helping advertisers pivot has been a big part of the work of our commercial team," Twitter CFO Ned Segal told analysts during a morning call as his company and brand marketers adjust to a deepening advertising recession.
Also during the latest quarter, Twitter announced it had reached a settlement with activist investor Elliott Management that includes tech investor Silver Lake taking a $1 billion stake in the social media giant and co-founder and CEO Dorsey remaining at the helm.
