Twitter announced stronger-than-expected user growth in what might be the business’s final quarter as a public corporation, after Elon Musk’s $44 billion takeovers.
However, due to the ongoing conflict in Ukraine, overall income and advertising sales fell short of analyst expectations. In early trade, shares were up 1%.
The findings highlight Musk’s hurdles in expanding the social media platform’s profitability to match its impact on news and culture.
Twitter has often been chastised for its slow pace of product introductions. Musk has suggested anything from providing a long-desired edit button to making the Twitter algorithm open source.
When Musk completes the transaction, he will be in charge of a firm that has long struggled with internal instability, uncertainty, and a lack of responsibility, according to eight current and former Twitter workers.
Twitter’s daily active users increased to 229 million in the first quarter ending March 31, up from 199 million the previous year. Analysts had predicted 226.8 million daily active users, therefore the number exceeded their expectations.
On Wednesday, Meta Platforms, a subsidiary of Facebook, declared a recovery in user growth, which aided the rise of social media stocks.
Twitter stated that an internal error caused the business to overstate quarterly user statistics by around 1.5 million from the fourth quarter of 2020 through the end of 2021. The corporation also alleged that had inflated its results in 2019, although it was unable to give data.
Because of the planned purchase, Twitter stated that it would not issue any forward-looking guidance and would retract its previous objectives and expectations. Former CEO Jack Dorsey declared last year that the business planned to quadruple yearly revenue and reach 315 million users by 2023, signaling a reversal of years of product stagnation.
According to Refinitiv IBES data, total sales in the first quarter were $1.2 billion, compared to analysts’ average forecast of $1.23 billion.
The majority of the company’s revenue comes from selling digital adverts on the website and app. In February, Twitter halted advertisements in Ukraine and Russia due to the ongoing invasion, which the Kremlin refers to as a “special military operation.”
Musk has stated that Twitter should not run advertisements, giving the network more control over its content restrictions. Advertisers often demand strict content filtering to avoid having their brand displayed next to inappropriate content.
Its net income increased to $513.3 million, or 61 cents per share, up from $68 million, or 8 cents per share, the previous year.