Around this time last year, Twitter put out its first earnings report as a public company. Wall Street sent the stock down more than 20% after hours on concerns about slowing user growth. Twitter and Wall Street repeated that song and dance after all but one earnings report: Twitter would post perfectly fine revenue numbers, but user growth would be meh so the stock would get hammered.
In recent months, however, Twitter has done everything possible to shut up Wall Street and finally change the narrative. Execs stressed to analysts in November that while Twitter may only have 284 million monthly active users, the social network reaches another 500 million people who don’t log in.
Then they revealed plans to accelerate the Twitter product cycle in order to better engage that larger user base and continue improving their monetization efforts.
The fruits of those efforts can be seen in the dizzying number of new product features and experiments in recent days, including (in no particular order): group direct messages, native video sharing, instant timelines, an overhauled homepage, a simplified promotional tool for small businesses and, for the first time, Promoted Tweets outside the Twitter ecosystem.
All of which brings us to Twitter’s December quarter earnings results, which it will report after the market closes at 4 p.m. ET on Thursday. This is arguably the report that will determine whether Twitter’s efforts to shift the narrative have a lasting impact on investors.
The consensus estimate among analysts polled by Thomson Reuters is that Twitter will report earnings of $0.06 per share on revenue of $453.1 million, which would be a new record for quarterly revenue and more than double the sales it posted in the same quarter a year earlier. Once again, though, there are signs that revenue won’t be the key metric among analysts.
Expectations for user growth among analysts range the gamut, but most expect Twitter’s monthly active user number will still be shy of the 300 million mark. Patil predicts about 287 million while analysts with Evercore predict 292 million. By comparison, Twitter reported having 241 million users in the same quarter a year earlier. Read more…