Social media platform Twitter reported a 16% year-on-year increase in its revenue (up 19% in constant currency) for the first quarter ended March. The company said it faced obstacles related to the war in Ukraine.
At the beginning of the quarter, the company announced the sale of its advertising platform MoPub for $1.05 billion. Excluding MoPub and MoPub Acquire, year-over-year revenue growth was 22%.
Net income was $513 million, representing a net margin of 43% and diluted EPS of $0.61. Net income of $513 million includes $970 million in before-tax profit from the sale of MoPub for $1.05 billion and income tax related to $331 million in profit. This compares to net income of $68 million, net margin of 7% and diluted EPS of $0.08 in the same period last year.
Given the pending acquisition of Twitter by Elon Musk, Twitter did not host a conference call, issue a shareholder letter, or provide financial guidance in conjunction with its first quarter 2022 earnings release.
On Monday, Musk formalized a deal to buy Twitter for about $44 billion, promising a more liberal touch for policing content on a platform with more than 200 million users. Upon completion of the transaction, Twitter will become a privately held company.
However, the transaction is subject to the completion of customary closing conditions and regulatory review and shareholder approval of Twitter. The transaction, which is expected to close in 2022, has been approved by Twitter’s board of directors.
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According to the company’s results, average monetizable daily active use (mDAU) for Q1 was 229.0 million, up 15.9% compared to the same quarter last year. Average US mDAU for Q1 was 39.6 million, up 6.4% compared to Q1 of last year. The average international mDAU for Q1 was 189.4 million, up 18.1% compared to Q1 of the previous year.
Costs and expenses totaled $1.33 billion, an increase of 35% year-on-year. This resulted in an operating loss of $128 million and an operating margin of -11%, compared to operating income of $52 million or a 5% operating margin in the same period last year.
Advertising revenue totaled $1.11 billion, an increase of 23% or 26% on a constant currency basis. Subscriptions and other revenue totaled $94 million, a decrease of 31% year-over-year, or a 5% year-over-year decrease when MoPub was excluded from the year-ago period.
Interestingly, one of the most prominent changes that Musk has proposed is the removal of the microblogging site’s reliance on ads. In an exclusive interview with ET, the former head of Twitter India and now the founder and CEO of ed-tech firm Invoke Metaversity said that the decision could have a serious impact on how teams are organised.
Maheshwari had said that there are large advertising and sales teams and a major part of the revenue comes from ad sales. He added, “The question is – what happens to that (ad and sales teams)? And these are deep changes. So, we’ll have to wait and see how it pans out and what it really means.” ”
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