To The Moon

​$Twitter(TWTR)$ released the first financial report since the new CEO took office, both advertising revenue and user growth missed expectation. It is reasonable that it should drop by 20% , but the market reaction is not severe.

The reason may be that Meta has led the whole social sector to fall a lot, and it is expected to be fully included. The guidance given by Twitter management in the first quarter of next year is also satisfactory, so the influence lags behind slightly regardless of the financial results.

Advertising missed expectation, and Apple's ATT policy has limited impact

Revenue in the fourth quarter was US $1.57 billion, of which advertising revenue was US $1.41 billion, up 22% year-on-year, mainly due to continuous improvement of advertising products, steady sales strategy and continuous growth of advertiser demand.

the US region contributed 885 million dollars, a year-on-year increase of 21%; The international market contributed 683 million dollars, up 23% year-on-year.

Advertising revenue is barely satisfactory. On the one hand, the demand of advertisers was not as strong as expected. Inside the company, total advertising participation, including clicks, fell 12%, partly due to Twitter's shift to video advertising and other forms, which usually receive lower participation from users, but are more costly and profitable for Twitter. In addition, the cost of each advertising investment has increased by 39%.

Twitter may be the only social company less affected by Apple's new privacy policy. This quarter, Apple ATT privacy policy still has little impact on revenue, and the management has included it in the optimistic guidance of the first quarter.

Because the impact of ATT may vary from one advertising platform to another, and each platform has its own unique advertising format and remedies, Twitter is constantly improving its advertising products to reduce the impact of ATT policy changes, and launching different advertising positioning and promotion tools for small and medium-sized advertisers (SMBs) and brand advertisers respectively.

In 2022, the company expects that the growth rate of effect advertising revenue will exceed that of brand advertising, and with the passage of time, it is expected to achieve a balance between the two faster.

Users growth will accelerate in 2022

The average DAU (mDAU) reached 217 million, up 13% year-on-year, still lower than the expected 218.5 million, and Twitter remains the largest news and current affairs discussion platform in the world.

In terms of regions, the number of new users in the United States has stagnated for a long time, and the mDAU is basically flat month-on-month. The worldwide mDAU has increased from 155 million last year to 179 million.

Twitter is also the best place for people to follow and discuss their interests through an ever-improving personalized user experience. Twitter has been trying to increase activity by helping users find topics they are interested in, such as selecting interests as part of the new account registration process, which reduces user churn, improves user stickiness and increases the number of new users.

In addition, Twitter's cooperation with NBA, Viacom CBS and Bloomberg has also helped promote Twitter to provide a wide range of high-quality live and on-demand video content.

Based on this, the management is very confident in the growth of users next year, and it is predicted that mDAU in the US and international markets will accelerate its growth in this year in 2022.

Revenue guidance is conservative, and 4 billion stock repurchase plan is approved

Twitter expects the total revenue in the first quarter of 2022 to be $1.17 billion to $1.27 billion. The guidance is relatively conservative, but the management is optimistic about the growth of users next year.

GAAP's operating loss was between $225 million and $175 million.

It is estimated that the annual revenue will increase by 20% in 2022, and the total cost and expenses will increase by about 20% compared with last year. On the conference call, the management once again defined the goal of achieving 315 million DAU and 7.5 billion US dollars in total revenue in 2023.

In addition, the board of directors also approved a new $4 billion share repurchase program.