In the 2019 Q4 results announced by social media giants Twitter, there is remarkable increase in revenue, making the year a profitable one for the Californian based company.
The report published on SEC website indicates total revenue of $1.01 billion Year-Over-Year growth in Monetizable Daily Active Usage (mDAU) of 21% in the Q4.
According to the report, 2019 revenue was $3.46 billion, an increase of 14% year-over-year. On a constant currency basis, revenue grew 15% year-over-year. The 2019 costs and expenses totaled $3.09 billion, an increase of 19% year-over-year. This yielded operating income of $366 million and 11% operating margin.
The year’s net income was $1.47 billion, which represents a net margin of 42% and diluted EPS of $1.87, billion, representing a net margin of 40% and diluted EPS of $1.56. Twitter generated adjusted net income of $259 million, adjusted net margin of 7%, and adjusted diluted EPS of $0.33. That’s apart from the income tax benefit from the establishment of deferred tax assets related to intra-entity transfers of intangible assets of $1.21 billion.
In 2018, excluding the income tax benefit from the release of deferred tax assets valuation allowance of $845 million, adjusted net income was $360 million, with adjusted net margin of 12% and adjusted diluted EPS of $0.47.
The report highlighted the operational and financial standing of the fourth quarter also: The Q4 revenue totaled $1.01 billion, an increase of 11% year-over-year. Advertising revenue totaled $885 million, which is an increase of 12% year-over-year. The total ad engagements increased 29% year-over-year while Cost per Engagement (CPE) decreased 13%.
The combination of revenue sources, from data licensing to other revenues brought in $123 million in total, a 5% increase year-over-year.
In the US, the total revenue generation amounted to $591 million, marking a 17% increase year-over-year. The global revenue increased at 3% which amounted to $416 million year-over-year. The Q4 running costs and expenditures took $854 million, an increase of 22% year-over-year. This yielded operating income of $153 million and 15% operating margin.
The net income of Q4 was $119 million, which represents a 12% net margin and diluted EPS of $0.15. This compares to net income of $255 million, a net margin of 28% and diluted EPS of $0.33 in the same period of the previous year. Excluding the income tax benefit from the release of deferred tax assets valuation allowance in the same period last year, adjusted net income was $135 million, with adjusted net margin of 15% and adjusted diluted EPS of $0.17.
There is also a surge in the number of users in the Q4 of 2019. Average monetizable daily active users (mDAU) were 152 million compared to 126 million in the same period of the previous year and compared to 27 million in the same period of the previous year and compared to 30 million in the previous quarter. On average, the international mDAU was 121 million in the Q4 compared to 30 million in the previous year and compared to 115 million in the previous quarter.
These highlights as acknowledged by Jack Dorsey indicate Twitter’s significant performance in the NYSE in the last Q4, and overall profitable 2019.
“2019 was a great year for Twitter. Our work to increase relevance and ease of use delivered 21% mDAU growth in Q4, with more than half of the 26 million mDAU added in 2019 directly driven by product improvements,” said Jack Dorsey, Twitter CEO.
The increase is as a result of improved techniques and features such as the increment of characters from 140 to 280. Other new exciting experiences have also contributed to the increase in the number of users.
“We reached a new milestone in Q4 with quarterly revenue in excess of $1 billion, reflecting steady progress on revenue product and solid performance across most major geographies, with particular strength in US advertising,” Twitter CFO, Ned Segal said. “We continue to see tremendous opportunity to get the whole world to use Twitter and provide a more personalized experience across both organic and promoted content, delivering increasing value for both consumers and advertisers.”
The 2020 financial year is expected to improve by 20% or more as Twitter is working to expand its reach. One of the goals is to build a data city that will accommodate larger audiences and revenue growth. The stock-based compensation expenses is expected to be between $425 million and $475 million, and the capital expenditures to be between $775 million and $825 million.
“Entering 2020, we are building on our momentum – learning faster, prioritizing better, shipping more and hiring remarkable talent. All of which put us in a stronger position as we address the challenges and opportunities ahead,” Jack Dorsey said.
The 2020 goals have been streamlined into four basic objectives: 1. Increasing development velocity and trust 2. Increasing healthy public conversation 3. Increasing revenue durability 4. Enabling anyone, anywhere to work at Twitter.
