Twitter Tops Q1 Estimates for User Growth and Income

With Elon Musk’s Takeover Looming, Twitter Tops Q1 Estimates for User Growth and Income

Twitter, which this week accepted a deal to go private in a $44 billion sale to Elon Musk, saw its income come in touch lighter than Wall Street predicated in the first quarter of 2022. But the social network blew away forecasts on earnings and user growth.

Q1 revenue was $1.20 billion, up 16% year-over-year, reflecting “headwinds associated with the war in Ukraine,” according to Twitter. Net income came in at $513 million, representing and diluted earnings per share of 61 cents.

Twitter boosted daily average monetizable daily active usage — its proprietary metric it calls “mDAU” — to 229.0 million for Q1, up 16% versus Q1 in the prior year and a sequential net gain of 14.3 million. Average US mDAU was 39.6 million for Q1, up 6.4% compared to Q1 of the prior year.

Twitter’s stock closed at $48.64/share Wednesday — 10% below the $54.20/share buyout price offered by Musk.  That gap indicates some investor belief that Musk’s deal for Twitter could potentially be blocked by regulators or otherwise fail to be consummated. The terms of the agreement include a $1 billion breakup fee if either side backs out.

Wall Street on average expected Twitter to report $1.22 billion in revenue and earnings of 3 cents per share, according to Refinitiv. Analysts were looking for 226.9 million monetizable DAUs in Q1, per StreetAccount.

Twitter was backed into a corner by Musk, who within a whirlwind span of three weeks went from disclosing a 9.2% stake in the company to making a $44 billion unsolicited bid after securing financing for the massive deal — one the board effectively was forced to accept on April 25 in the absence of other options.