Twitter Q1 Adj. EPS, Revenues Top View; Sees Higher Revenues Over Long Term

(RTTNews) - Twitter Inc. (TWTR) Wednesday reported narrower net loss in its first quarter and higher adjusted EBITDA margin as it remains focused on streamlining cost structure. Revenues declined on lower advertising and US revenues. However, adjusted earnings per share and revenues topped market estimates.

In pre-market activity on the NYSE, Twitter shares were gaining 10.5 percent to $16.20.

Jack Dorsey, Twitter's CEO, said, "We're proud to report accelerating growth in daily active usage for the fourth consecutive quarter, up 14 percent year-over-year. ... While we continue to face revenue headwinds, we believe that executing on our plan and growing our audience should result in positive revenue growth over the long term."

For the first quarter, net loss was $61.56 million or $0.09 per share, narrower than loss of $79.73 million or $0.12 per share a year ago.

Excluding items, adjusted net income was $82.40 million or $0.11 per share, compared to income of $102.72 million last year. Adjusted earnings per share were $0.11, compared to $0.15 a year ago.

On average, 19 analysts polled by Thomson Reuters expected earnings of $0.01 per share for the quarter. Analysts' estimates typically exclude special items.

Adjusted EBITDA, a key earnings metric, was $170 million, a decrease of 6 percent year-over-year, while adjusted EBITDA margin was 31 percent, up from 30 percent last year.

The company posted first-quarter revenue of $548 million, down 8 percent from last year's $595 million. Analysts were looking for revenues of $511.91 million.

Advertising revenue totaled $474 million, a decrease of 11 percent year-over-year, while Data licensing and other revenue climbed 17 percent.

US revenue dropped 13 percent to $341 million, while International revenue grew 2 percent to $208 million.

In the quarter, total ad engagements increased 139 percent, while cost per engagement decreased 63 percent.

Average monthly active users were 328 million, up 6 percent year-over-year. Average daily active usage grew 14 percent, an acceleration from 3 percent in the first quarter of 2016.

Looking ahead, for the second quarter, Twitter expects adjusted EBITDA to be between $95 million and $115 million, adjusted EBITDA margin to be between 21 percent and 21.5 percent.

Twitter said it continues to expect advertising revenue growth to continue to meaningfully lag that of audience growth in 2017, including in the second quarter.