Mon, Nov. 9, 12:45 PM
- Detwiler Fenton's Alex Arnold thinks ~50M U.S. monthly active users (MAUs) is close to a top, even as international MAUs and non-logged-in users present growth opportunities.
- Arnold also doubts Twitter's (NYSE:TWTR) Moments launch will significantly boost user growth, and observes relatively few advertisers have created "real-time" ad campaigns that leverage Twitter's status as a venue to follow and discuss breaking events.
- Worth noting: Twitter reported 66M U.S. MAUs for Q3. However, that figure was flat with Q2 and Q1, and up by only 2M from Q3 2014. Q3 international MAUs totaled 254M, up from 250M in Q2 and 224M in Q3 2014.
- Nonetheless, 65% of Twitter's Q3 revenue still came from the U.S., by far the world's biggest advertising market. U.S. revenue rose 54% Y/Y to $370M, and international revenue 65% to $199M.
- Twitter is among the bigger large-cap tech decliners amid a 1.2% Nasdaq decline.
Wed, Oct. 28, 1:09 PM
- Off more than 10% yesterday evening, Twitter (TWTR -1.6%) is now down just moderately after providing soft Q4 guidance to go with its Q3 beat. While numerous analysts have cut their targets, Stifel's Scott Devitt has provided a contrarian upgrade to Buy, expressing faith in Jack Dorsey's ability to right the ship.
- Devitt: "We have been long-time critics of Twitter, the strategy and the stock, until today ... As a founder, Jack has the freedom and vested interest to fix the product problem at this company. Our wish list: 1) make product easier to use, 2) offer better tools for curation, and 3) test / iterate core product extensions (e.g. Lists, Moments, Periscope, Vine). Twitter faces declining expectations and easing comps as it approaches 2016, which should be a perfect backdrop for a product-focused founder to look like a savior."
- Brean's Sarah Hindlian (Buy) thinks Q4 guidance could be conservative. "[We estimate] that Twitter’s guidance is embedding virtually NO benefits from Q4 ad or TellApart seasonality, or from the ramping DoubleClick partnership. As a result of our analysis, we feel highly convicted that guidance was sandbagged as Mr. Dorsey clears the decks. Given the generally positive tone on the conference call (best we have heard mgmt. in several quarters), focus on Moments, Auto-Play Video, and DoubleClick ramp in Q4’15, we continue to believe that it is too soon to give up on the stock.”
- By contrast, Morgan Stanley's Brian Nowak (Underweight rating) argues the guidance "reinforces our concern that Twitter will be unable to gain enough incremental share of ad budgets to deliver consensus expectations and support current valuation." Barclays' Anthony DiClemente (Neutral): "[A]s long as Twitter user growth remains stalled, it will be difficult for revenue to reaccelerate, muting the 3-5 year growth outlook."
- On the earnings call (transcript), CFO Anthony Noto stated ad load was roughly flat Q/Q in Q3 relative to Q2's sub-optimal level, even as ad revenue rose 13% Q/Q. He suggested auto-play video ad growth improved monetization. Noto also mentioned off-network ad sales were 13% of ad revenue, up from 8% in Q2, and talked up the potential of the DoubleClick deal to both improve ad measurement and reach advertisers buying only via DoubleClick.
- Separately, Twitter ran its first TV ad yesterday night (video) during Game 1 of the World Series. It focused on using Moments as a way to follow baseball events.
- Twitter's results/guidance, details
Wed, Oct. 28, 9:12 AM
Tue, Oct. 27, 5:41 PM
Tue, Oct. 27, 4:14 PM
Fri, Oct. 23, 1:38 PM
- Twitter's (TWTR +5.1%) Moments feature was ad-free -- for a moment.
- The curated-events feature, launched just two weeks ago, gets its first advertiser this weekend in the Rocky sequel film Creed, made by MGM, Warner Bros. and New Line Cinema. Twitter shares are rebounding today from a decline this week after a Morgan Stanley downgrade.
- Twitter had already teamed up with media brand partners who can curate their own Moments. "Promoted Moments" will have all the features of a Moment but created by a brand, which will have 24 hours of premium real estate. The company plans to have one each day.
- Video options available in Promoted Moments could bring higher ad rates, as Twitter wrestles with slowing revenue growth.
- Twitter announces quarterly earnings on Tuesday.
- Previously: Dorsey gives a third of his shares to employees (Oct. 23 2015)
- Previously: Twitter looks to reset relationship with app developers (Oct. 22 2015)
- Previously: Twitter slides on Morgan Stanley downgrade (Oct. 21 2015)
Wed, Oct. 21, 7:30 AM
- Citing limited user growth and declining engagement, lack of material incremental advertiser demand, an already high ad loan and high ad pricing, and rising mobile competition holding back earnings power, Morgan Stanley downgrades Twitter (NYSE:TWTR) to Underweight, with price target of $24 from $36.
- "In our view, Street numbers haven't taken these challenges into account either, as we find ourselves 14% and 25% below 2016 and 2017 EBITDA. We see negative revisions and a lofty valuation - Twitter now trading at 6.3x 2017 revenue and 19.2X EBITDA - driving underperformance."
- Morgan sees FY16 non-GAAP EPS of $0.59 and FY17 of $0.83, down from previous views of $0.62 and $1.02, respectively.
- Shares -4% premarket to $29.67.
Tue, Oct. 13, 8:47 AM
- Confirming reports of job cuts, Twitter (NYSE:TWTR) plans to shave its global workforce by 8%, or 336 employees. The company expects to book total restructuring expenses of $5M-$15M, which will be recognized in the year's final quarter.
- Turning to the just-concluded Q3, Twitter expects revenue and adjusted EBITDA above the high end of its previous forecasts of $545M-$560M and $110M-$115M, respectively. Street consensus on revenue is $559M.
- Jack Dorsey: "The roadmap is also a plan to change how we work, and what we need to do that work. Product and Engineering are going to make the most significant structural changes to reflect our plan ahead. We feel strongly that Engineering will move much faster with a smaller and nimbler team, while remaining the biggest percentage of our workforce. And the rest of the organization will be streamlined in parallel."
- Source: SEC Form 8-K
- Shares +2.3% premarket
- Previously: Report: Twitter planning company-wide layoffs next week (Oct. 9)
Fri, Oct. 9, 9:59 AM
- Twitter (TWTR +1%) has updated to Twitter's Amplify video ad platform to let advertisers buy pre-roll ads for various content categories, rather than having to set up a deal with a particular content publisher. The solution also lets advertisers target specific audience groups watching a type of content.
- Publishers currently supporting the service include Sports Illustrated, The Weather Channel, Fox, and AOL. They receive a cut of ad revenue via automated payments.
- The solution has much in common with how YouTube (still by far the biggest player in online video ads) monetizes its content. One notable difference: Twitter is taking a 30% cut on ad sales, less than YouTube's (GOOG, GOOGL) 45%. Facebook (NASDAQ:FB) has also been gradually rolling out new video ad buying options and formats. However, the company has said it's uninterested in pre-roll ads.
- Shares have rallied strongly during a week that has seen Jack Dorsey named permanent CEO, and the Moments (Project Lightning) curated event stream service roll out.
- Update: Some more Twitter video ad news: Glenn Otis Brown, the exec leading Twitter's video ad program, has left to join startup investor/builder Betaworks.
Wed, Oct. 7, 4:18 PM
- Twitter (NYSE:TWTR) rallied towards $30 today following news Saudi prince Alwaleed Bin Talal has upped his stake to nearly 5.2% (34.9M shares). Volume (33.6M shares) easily topped a 3-month daily average of 21M.
- The gains also come a day after Twitter launched its Moments curated news/event streams. Reactions have been mixed: Critics argue Moments lacks the personalization and real-time feel Twitter normally provides, while fans argue it provides a quick and easy way to pull up Twitter content about newsworthy events, and will appeal to those confused or intimidated by Twitter's regular UI.
- Brean's Sarah Hindlian (Buy, $40 target) falls into the latter category. "In our view, this is the first major product innovation since Twitter’s IPO ... Moments further defines Twitter as an advertiser friendly media platform for live events. This highly appealing product, when combined with a dedicated media campaign in Q4’15, should help to reinvigorate the user case, though patience will be required as it is rolled out globally. We continue to view the risk-reward in Twitter shares as attractive."
- Well-known tech analyst Ben Thompson is also a fan: "[T]he company doesn’t need stories from publications because it has nearly all of the originators of those stories already on its service ... What is exciting is that Moments isn’t close to fulfilling its potential: imagine a tweet-based newspaper drawn not only from the best sources in a mobile-friendly format, but one perfectly customized to you ... The [ad] placement opportunity within stories is obvious, and like the best sort of in-stream native advertising the brand in question will take-over the entire screen, if only for a moment."
- Thompson is also optimistic about Jack Dorsey's ability to fix issues with Twitter's core product - "It remains inexplicable that tweet payloads, such as links, pictures, and videos, count against the 140-character limit ... Twitter conversations, which often contain the very best content on Twitter, are horribly broken and nearly undiscoverable." - and predicts "the summer of 2015 will be seen as the low point for Twitter, and that this week in particular will mark the start of something new and valuable."
Mon, Oct. 5, 1:05 PM
- Twitter (NYSE:TWTR) has added to the premarket gains it saw after the company confirmed chairman/co-founder Jack Dorsey will be its permanent CEO (while keeping the same job at Square), and named sales chief Adam Bain (previously viewed as a CEO candidate) its COO. (8-K filing)
- The company also stated ex-CEO Dick Costolo has resigned from the board (as expected), and disclosed on a conference call it plans to separate the chairman and CEO positions to "simplify the demands on [Dorsey's] time as well as to make sure we bring a fresh voice and new leadership to the board."
- Fellow co-founder and director Evan Williams defends the board's decision. "Jack has already demonstrated the ability to inspire the team and think boldly about the next phase of Twitter. His connection to its roots informs a depth of vision and authenticity of voice, which I’ve been excited to hear. We looked at many (many, many) other options ... I honestly didn’t think we’d land on Jack when we started unless he could step away from Square. But ultimately, we decided it was worth it."
- Dorsey on (where else?) Twitter: "My focus is to build teams that move fast, and learn faster. In the past 3 months we have increased our speed and urgency at both [Twitter and Square] ... Twitter is the most powerful communications tool of our time ... Our work forward is to make Twitter easy to understand by anyone in the world, and give more utility to the people who love to use it daily!"
- In other Twitter news, the San Francisco Business Times reports the company has cancelled plans to add ~100K sq. feet of office space at a building close to its HQ, possibly due to a hiring slowdown. Twitter currently occupies 750K sq. feet at its HQ.
Fri, Oct. 2, 11:35 AM
- Up 5.3% on Wednesday (aided by a report Jack Dorsey will soon be named by permanent CEO) and down 8.4% on Thursday as markets digested the news, Twitter (TWTR) is rallying again today following a spirited defense from Deutsche's Ross Sandler, who again compares the microblogging platform to Facebook in 2012 (when mobile monetization concerns were running high).
- Sandler asserts Twitter's anticipated Project Lightning (could be called Moments), which will let users follow curated feeds for major events, will launch on Tuesday. He argues the feature could be pivotal in boosting slowing MAU growth and converting casual Twitter users into regulars.
- He forecasts slightly above-consensus Q3 revenue, and notes Twitter should have about 3 weeks of Lightning/Moments data by the time its Q3 report arrives. "Our checks continue to point to solid revenue trajectory in most markets, including US direct sales, self-serve and international."
- Sandler's note is overshadowing a neutral coverage launch from Wedbush's Michael Pachter, who remains concerned about the user growth, engagement, and ease-of use issues Sandler sees Lightning help address.
Thu, Oct. 1, 12:17 PM
- After closing up 5.3% yesterday following a Re/code report stating Jack Dorsey will soon be named the company's permanent CEO, Twitter (NYSE:TWTR) has more than given back its gains today. The Nasdaq is down 1.1%.
- Street reactions to the report have been mostly positive, but often with reservations about the fact Dorsey appears set to remain Square's CEO. Nomura's Anthony DiClemente (Neutral, $33 target): "The notion that Jack Dorsey would serve as CEO of two public companies gives us pause, particularly given that concerns persist regarding Twitter’s user growth trajectory and ability to stem deceleration in monetization trends. That said, the naming of a highly respected CEO should mitigate investor concerns regarding the stability of leadership, as it should ensure that other key leaders at Twitter remain in place."
- Monness Crespi's James Cakmak (Buy): "We went on record this week stating that not only is a dual- CEO not ideal, nor are the comparisons to Steve Jobs and Elon Musk in justifying it ... We believe the framework for Twitter 2.0 needs to be set by early next year ... We have repeatedly stated virtually all possible relevant content is already there (i.e. publishers, journalists, celebrities, etc.), so it is about relieving users of the burden of curating their content through following the right people and taking the responsibility back to the company. Project Lightning does that."
Wed, Sep. 30, 1:57 PM
- Re/code reports chairman/co-founder/interim CEO Jack Dorsey is expected to be named Twitter's (TWTR +3.1%) permanent CEO as soon as tomorrow.
- Shares have spiked higher on the news. The NYT recently reported support for making Dorsey (still Square's CEO) Twitter's permanent CEO was growing among directors and investors, in spite of the board's prior insistence on Twitter's permanent chief making a "full-time commitment" to the job.
- Re/code adds Dorsey will "apparently" continue to run Square (set to go public), and that "there is likely to be some shakeup of the board too, most immediately the departure of [Dick] Costolo from the board." Rumors of a Costolo board exit have been around for a while.
- In other Twitter news, the company has made its Buy button and related payment tools more broadly available to U.S. online retailers, and partnered with e-commerce software/services firms Shopify, Demandware, and Bigcommerce to support the buttons on their platforms (used by numerous merchants). Much like Facebook with its Buy button, Twitter doesn't charge for the feature, but benefits to the extent it boosts e-commerce ad conversion rates, and thus motivates retailers to up their Twitter ad spend. Best Buy is an initial supporter.
- Yesterday: Twitter reportedly thinking of allowing posts longer than 140 characters
- Update: Twitter closed up 5.3%. The Nasdaq rose 2.3%.
Thu, Sep. 24, 10:44 AM
- "Our analysis suggests current consensus forecasts imply a 45% improvement in monetization in the U.S. (and ~60% outside the U.S.), which may prove difficult given that one of the key recent levers in the U.S. – ad load – may already be in the 5-10% range," says Citi's Mark May. "We believe this is unlikely."
- May moves Twitter (NYSE:TWTR) from Neutral to "Neutral/High Risk," and cuts the price target to $30 from $37.
- Twitter's updated app for iOS 9 has "@Jack's fingerprint" all over it, says SunTrust's Robert Peck, reiterating his Buy rating and $38 price target. The changes - including "universal links" - are some of the "low-hanging fruit" that can improve the user experience and boost organic MAUs.
- Peck believes Dorsey should be named permanent CEO as soon as possible.
- Twitter is lower by 4.3% to $25.64.
Tue, Sep. 8, 7:45 PM
- 14 months after being replaced as Twitter's (NYSE:TWTR) CFO by Anthony Noto, Mike Gupta has left the company to become the CFO of fast-growing app container software firm Docker. Gupta had been serving as Twitter's SVP of strategic investments.
- Twitter's executive departures haven't let up following Dick Costolo's resignation as CEO/Jack Dorsey's return as interim CEO. Product execs Christian Oestlien and Todd Jackson announced in July that they're leaving. M&A chief Rishi Garg announced his departure in June. Meanwhile, Reuters recently observed Uber and Lyft have been poaching Twitter engineers and managers.
- Three months after Chris Sacca's missive, debate continues swirling about the quality and long-term potential of Twitter's core service. Eugene Wei argues the 140-character limit needs to go, and that Twitter should learn from Instagram and Snapchat's willingness to shake up their platforms. "The power of Twitter, deep down, is that it's a public messaging protocol. The 140 character limit is not its secret power. The network is."
- By contrast, Startup L. Jackson thinks Twitter's core product is fine (if relatively limited in scale/addressable market), and that the company should focus on growing non-core products (e.g. Vine, Periscope) that can leverage core Twitter. "Twitter’s core user base and existing content are sufficient to bootstrap more or less any kind of social product, and they have proprietary access to this asset. If I were them, I’d build, buy, and potentially invest in promising companies that could benefit from proprietary access to the graph/content."
- Shares sold off on a day the Nasdaq posted a 2.7% gain. They now go for 5.9x a 2016 sales consensus of $3.23B. 2015 and 2016 consensus revenue growth estimates are respectively at 59.4% and 44.3%.
Twitter Inc is a platform for public self-expression and conversation in real time. It provides a way for people to stay informed about their interests, discover what is happening in their world and interact directly.
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