Well, the leak (which ironically came out on Twitter only, and not Facebook) was right, and the full story is even worse than Selerity reported:
- TWITTER 1Q LOSS PER SHARE 25C
- TWITTER INC 1Q ADJ. EPS 7C , EST. 4C
That much we knew. Here is where it gets worse:
- TWITTER 1Q REV. $ 435.9M, EST. $456.2M
- TWITTER SEES 2Q REV. $470M TO $485M, EST. $538.1M
- TWTR SEES YR REV $2.170B-$2.270B, SAW $2.3B-$2.35B, EST $2.37B
Full report [9]:
Twitter, Inc. (NYSE: TWTR) today announced financial results for the quarter ended March 31, 2015, and outlined lower 2015 expectations.
- Q1 revenue of $436 million, up 74% year-over-year, slightly below the previously forecast range of $440 million to $450 million. Excluding the impact of year-over-year changes in foreign exchange rates, total revenue would have increased 80%.
- Q1 net loss of $162 million and non-GAAP net income of $47 million
- Q1 GAAP EPS of ($0.25) and non-GAAP EPS of $0.07
- Q1 adjusted EBITDA of $104 million, above the previously forecast range of $89 million to $94 million, representing an adjusted EBITDA margin of 24%
Twitter's first quarter revenues were affected by a lower-than-expected contribution from its newer direct response products. The Company expects this revenue impact to continue for the remainder of the fiscal year as outlined in the outlook section below.
"While we exceeded our EBITDA target for the first quarter, revenue growth fell slightly short of our expectations due to lower-than-expected contribution from some of our newer direct response products," said Dick Costolo, CEO of Twitter. "It is still early days for these products, and we have a strong pipeline that we believe will drive increased value for direct response advertisers in the future. We remain confident in our strategy and in Twitter's long-term opportunity, and our focus remains on creating sustainable shareholder value by executing against our three priorities: strengthening the core, reducing barriers to consumption and delivering new apps and services."
In addition, Twitter made two announcements today aimed at strengthening its direct response capabilities:
- Twitter announced that it has entered into a definitive agreement to acquire TellApart, Inc., a leading marketing technology company providing retailers and e-commerce advertisers with unique cross-device retargeting capabilities through dynamic product ads and email marketing.
- Twitter also announced a partnership with Google's DoubleClick platform to improve advertising performance measurement and attribution for Twitter direct response marketers. As part of the partnership, Twitter will also make its inventory available through the DoubleClick Bid Manager, making it easier for clients who prefer to centralize their buying through DBM to create and manage campaigns on Twitter.
Outlook
Twitter's outlook for the second quarter of 2015 is as follows:
- Revenue is projected to be in the range of $470 million to $485 million.
- Adjusted EBITDA is projected to be in the range of $97 million to $102 million.
- Stock-based compensation expense is projected to be in the range of $190 million to $200 million, excluding the impact of equity
- awards that may be granted in connection with potential future acquisitions.
Twitter's outlook for the full year of 2015 is as follows:
- Revenue is projected to be in the range of $2.170 billion to $2.270 billion.
- Adjusted EBITDA is projected to be in the range of $510 million to $535 million.
- Capital expenditures are projected to be in the range of $500 million to $650 million.
- Stock-based compensation expense is projected to be in the range of $750 million to $790 million, excluding the impact of equity awards that may be granted in connection with potential future acquisitions.
Since there is no $140 billion stock buyback to deflect from the "no growth" reality, the stock promptly crashes some 20% after reopening.
[10]
As Nanex shows, TWTR actually did the flash crash dash, sliding to $0.01 briefly.
$TWTR [11] reopened and went to 1¢ from tripping circuit breaker. Circled trades may have occurred during halt! pic.twitter.com/ECMzpZ1Oa6 [12]
— Eric Scott Hunsader (@nanexllc) April 28, 2015 [13]
Of course, here's Cramer:
Twitter is a core holding of Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. During the most recent weekly roundup, this is what Jim Cramer, Portfolio Manager & Jack Mohr, Director of Research - Action Alerts PLUS had to say about the stock:
Twitter (TWTR:NYSE; $50.82; 1,400 shares; 2.69%; Sector: Technology): The shares traded higher this week following strong performance and underlying trends seen in both Facebook's (FB) and Google's (GOOGL) results. We believe Twitter is partially out of the sentiment doghouse heading into first-quarter 2015 results next week, but is still largely under-owned relative to most large-cap Internet stocks.
Twitter has likely the greatest array of company-specific catalysts of any company in its sphere this year, including Periscope, core monthly active user (MAU) acceleration from the Google partnership, and new core features like embedded video. Industry channel checks point to solid uptake of Twitter's new targeting features and formats in the first quarter, but the greatest lever the company can pull, in our view, is the pace of on-boarding of new advertiser demand. For some perspective, we estimate that Google generates half of its revenue from smaller advertisers who spend less than $250k per year, which make up 95% of the 8 million-plus AdWords accounts, so building out the "tail" should allow Twitter to grow well-above average over the next several years. With a global ad load between 1% to 2% and 85% from mobile, we think TWTR has more revenue runway than any other company in the Internet space. Our target is $55.
- Jim Cramer and Jack Mohr, 'Weekly Roundup' originally published 4/24/2015 on ActionAlertsPLUS.com.
And now perhaps someone will ask how much of Facebook's 1.4 billion "users" are actually real.