Twitter shares drop after lukewarm revenue forecast

Twitter has warned of rising costs in the coming year and released lukewarm revenue forecasts despite a larger increase in digital advertising spending during the pandemic.

The San Francisco-based social media company said its first-quarter revenue increased 28% year-on-year to $ 1.04 billion, slightly ahead of analysts’ expectations of $ 1.03 billion. dollars.

Twitter shares fell nearly 9% in after-hours transactions.

The company recently revamped its offering to advertisers amid a larger expansion in digital ad spend reported by bigger rivals Facebook and Google. However, Twitter said it expected revenue for the second quarter of this year to be between $ 980 million and $ 1.08 billion, at the lower end of consensus estimates of $ 1.05 billion. of dollars.

He also said total costs and expenses would increase by at least 25% year over year in 2021, increasing as the year progresses.

Twitter has invested in several upcoming features in an effort to boost engagement and diversify its revenue streams beyond advertising, amid concerns over slow product innovation.

“We continue to expect total revenues to grow faster than expenses in 2021, assuming the global pandemic continues to improve and we see a modest impact from rolling out the changes associated with iOS 14.5,” a Twitter said, referring to Apple’s upcoming privacy changes on its iPhone. operating system, which will make it more difficult to track ads.

“The speed will depend on a variety of factors, including our execution on our direct response roadmap and macroeconomic factors.”

Monetizable daily active users – a local metric that counts the number of logged-in users that the platform advertises to – grew 20% year-over-year to 199 million, just below the 200 million expected by analysts.

Net income was $ 61 million, compared to a net loss of $ 8 million in the same quarter last year.