Social media company Twitter (NYSE:TWTR) reported fourth-quarter revenue that beat analysts’ estimates, capitalizing on a robust holiday season for digital advertising.
Twitter said revenue rose 28% to $1.29 billion U.S. compared with the $1.19 billion U.S. analysts had predicted. Twitter cited "strong brand advertiser demand in the U.S." as a driver of ad sales in the fourth quarter. Net income rose to $222 million U.S., or 27 cents a share.
However, despite the positive financial results, the social network added fewer new users than projected and warned that audience gains in 2021 will slow compared with last year’s pandemic-fueled surge.
Twitter reported 192 million daily active users, 26% growth from a year earlier but shy of estimates for 193.4 million users. For all of 2020, the company added 40 million new daily users, crediting the gains to "product improvements" and a series of major events that drew in audiences, including the U.S. presidential election.
It was a strong quarter for digital advertising companies in general, which were buoyed by the push toward online shopping during the pandemic. Facebook, Google, Snap and Pinterest all reported better-than-expected revenue for the period.
In the recent period, Twitter added one million new users in the U.S., and now has 37 million average daily users in its most profitable market. Shares of Twitter were little changed in extended trading following the report after closing at $59.87 U.S. a share. The stock has gained about 62% in the past year, reaching its highest level since 2014.
