Trump’s Favorite Form of Communication Twitter Stumbles Due to COVID-19 coronavirus
The near-term financial impact of the COVID-19 coronavirus pandemic is rapidly evolving and difficult to measure. Based on current visibility, Twitter expects Q1 revenue to be down slightly on a year-over-year basis. Is this bad news for Trump who uses Twitter daily, sometimes several times a day?
Twitter expects to incur a GAAP operating loss, as reduced expenses resulting from COVID-19 disruption are unlikely to fully offset the revenue impact of the pandemic in Q1.
Initially Twitter had announced more positive expected results for the first quarter of 2020, however, the company is now withdrawing its revenue and operating income guidance for Q1, as well as its outlook for expenses, stock-based compensation, headcount, and capital expenditures for the full year due to the growing impact of COVID-19 on the global operating and economic environment and their effect on advertiser demand.
“Twitter’s purpose is to serve the public conversation, and in these trying times our work has never been more critical. We’re seeing a meaningful increase in people using Twitter, and our teams are demonstrating incredible resilience adapting to this unprecedented environment,” said Jack Dorsey, Twitter’s Chief Executive Officer. “We’ll continue to navigate this environment focusing on supporting our employees, customers, and partners, while strengthening our service for everyone around the world and adjusting to a new operating and economic environment.”
Global conversation about COVID-19 as well as ongoing product improvements are driving strength in total monetizable DAU (mDAU), with quarter-to-date average total mDAU reaching approximately 164 million, up 23% from 134 million in Q1 2019 and up 8% from 152 million in Q4 2019.
“Twitter had a strong start to the year before the effects of COVID-19 began spreading more broadly, including a successful Super Bowl and overall strength in the US. The COVID-19 impact began in Asia, and as it unfolded into a global pandemic, it has impacted Twitter’s advertising revenue globally more significantly in the last few weeks,” said Ned Segal, Twitter’s Chief Financial Officer. “We have made solid progress on our consumer and revenue product priorities and we remain confident in our opportunity and strategy. We hope everyone stays healthy and safe.”
Twitter expects to release financial results for the first quarter of 2020 on April 30, 2020, before the market opens at approximately 4 am Pacific Time (7 am Eastern Time). On the same day, Twitter will host a conference call to discuss those financial results at 5 am Pacific Time (8 am Eastern Time).