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When is Twitter Earnings Disappointing?
In the second quarter of 2015, Twitter posted disappointing results. The social media platform missed analysts’ expectations for revenue, earnings, and user growth. Revenue declined 1% year over year to $1.18 billion, whereas Wall Street had expected $1.32 billion, representing 10.5% year over year growth. This is Twitter’s biggest miss since its inception and will certainly affect its stock price. In the next quarter, it plans to report earnings that beat expectations.
Results for the quarter ended in June
During the second quarter of fiscal 2020, Unilever reported revenue of $4,636 million and a gross margin of 45.3%. It also reported an operating income of $1,209 million, or $8.74 per diluted share, compared to revenue of $4,060 million in the March 2022 quarter. See the article : Why Would Elon Musk Want to Buy Twitter?. The growth rate of the Beauty & Personal Care segment was broad, with Hair Care and Soaps achieving double-digit growth. The Skin Care and Color Cosmetics segments also delivered healthy YoY growth.
Adjusted loss of 8 cents a share
The social media company Twitter reported a second-quarter net loss of $270 million on Wednesday, much lower than the $66 million it earned in the same period last year. The company attributed its lackluster results to the deteriorating macroeconomic environment and uncertainty surrounding the Elon Musk acquisition. See the article : Is Twitter Stock Expected to Rise?. Adjusted loss of 8 cents a share was the company’s first loss in more than two years. Analysts expected Twitter to make a profit of 20 cents a share in the second quarter, so the company’s loss was worse than the consensus expectation.
Although Snap is largely dependent on advertising revenue, the company reported a weak quarter despite raising its forecast for revenue growth through 2021. It also reported weak forward guidance, suggesting that it will be hard to grow the business. However, Twitter still has a lot of work ahead of it. Twitter’s revenue grew 37% to $5.08 billion in the second quarter, beating Wall Street estimates of $1.18 billion. Analysts expected revenue growth of 10%. The company grew its user base at a healthy pace during the quarter, gaining another 5 million users over the third quarter.
The company blames its decline on several factors, including the ever-rising interest rates and inflation fears. The Russian invasion of Ukraine has also negatively affected Twitter’s global business and supply chains. However, the company also blames the “recession” on the ongoing legal battle between Musk and Twitter. In addition to its financial troubles, Twitter’s stock price is highly correlated to its business outlook.
Non-GAAP costs and expenses
Recently, Twitter released its non-GAAP earnings disclosure. Non-GAAP measures include numerous adjustments to net income reported on a GAAP basis. Read also : How to Get Someone’s Twitter Account Deleted. Here is a breakdown of the non-GAAP adjustments to Twitter’s net income:
Net income before provision for income taxes is calculated by dividing net income by non-GAAP diluted share count, and adjusted EBITDA is net operating income excluding stock-based compensation expense, depreciation and amortization expense, and a one-time nonrecurring gain. This measure is also used to evaluate Twitter’s profitability and cash position. Twitter defines adjusted EBITDA as net income excluding stock-based compensation expense, depreciation and amortization, interest and other expense, restructuring charges, and one-time nonrecurring gain.
Revenue per user increased 33% during the quarter. Revenues from advertising and subscriptions decreased 31% and 5%, respectively. Non-GAAP costs and expenses of Twitter earnings were $1.33 billion and $128 million, respectively, up 35% and 31% year-over-year, respectively. In addition, Twitter incurred an operating loss of $128 million, or a loss of -11%. The company’s stock-based compensation was $177 million, up 60% over the year and accounting for 15% of revenue.
While there is a high correlation between non-GAAP costs and expenses and GAAP earnings per share, non-GAAP financial measures can be misleading. Twitter uses adjusted free cash flow to analyze its operating performance. Adjusted free cash flow represents a more conservative measure of cash flows, as they do not include funds available for discretionary use or for cash needs. Non-GAAP costs and expenses should not be used in place of GAAP financial information, as they do not reflect a standardized methodology.
