Tuesday, April 29, 2014

Twitter (TWTR) - Earnings Postmortem; Just The Facts: Everything You Need to Know

TWTR just released earnings and after hours the stock is trading at around $38.15 down from a close of $42.62. The Symbol Summary is included below.

Provided by Livevol

Note that I have highlighted the AH trades.
UPDATE 4-30-2014

Provided by Livevol

TWTR has in fact broken into a new all-time low.

This is a review of all the information that has come out thus far from the earnings release.  First, with respect to stock price, I have included the all-time stock price for TWTR, below.

Provided by Livevol

We can see the meteoric rise and the equally abrupt fall in price.  The all-time low for TWTR is $38.80 and for the moment (it's just a moment in AH), it is now trading below that all-time low.

Now, the earnings results:

  • Average Active Users: 255M up 5.8% quarter-over-quarter and 25% Y-O-Y
  • "Freshened" Timelines: 157 billion times up 15% from last year but below analyst estimates
  • Revenue: $250M (up 119% from $114M a year ago) above estimates of $241.5M
  • Ad Revenue per Thousand Timeline Views: $1.44 (nearly 2x last quarter).
  • Ad Revenue: $226M up 125% from year ago
  • Mobile Ad Revenue: 80% of total revenue
  • Mobile Ad Market Share: Estimate 2.7% (up from 2.4%) vs FB 22% and GOOG 47%
  • "Excluding Items" EPS: Even vs. expected -0.03 (loss)
  • Net Loss: $135MM (up 5x from $27M a year ago)

Revenue Next Quarter: Company forecasts $272M; Wall St. estimates were [$270M, $280M]
Revenue for Full Year: Wall St. Estimates: $1.2B - $1.25B

But, the chart of the day comes from BUSINESS INSIDER:


Yep... Active user growth is down to 5.8% quarter over quarter, down from over 120%. Can you imagine if that turns negative?... yikes.

For the record my position is:
Long CS 46/48
Long PS 39/37

This is trade analysis, not a recommendation.

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  1. you sold wings to lower the debit?

  2. Good Luck on your trade Ophir. But how do you evaluate of Twitter longer term? Do you see value in the company as a medium to reach potential clients/customers or are you strictly reading the options market shorter term?

  3. Not surprised at the decreasing active user base. The app is a very simple app and not very useful. You cannot even search through the tweets you receive. I cannot believe there are not so many other tweet apps. There will always be active users like you who produce content, but you don't know how many actually get read. I think this is long put worthy stock.