Twitter beat Wall Street earnings expectations for the fourth quarter of 2020, and netted a gain of daily users — though not as many as analysts were projecting — to close out a tumultuous year.
The social-networking company reported a net gain of 5 million monetizable daily active users, to 192 million worldwide for Q4. That’s up from 187 million in Q3 and 152 million in the year-earlier period.
Q4 revenue totaled $1.29 billion, an increase of 28% year over year, and Twitter posted net income of $222 million, representing diluted earnings per share of 27 cents. Wall Street analysts on average expected Twitter to gain 9 million daily active users in the quarter, with consensus estimates of $1.19 billion in revenue and EPS of 16 cents.
Q4 was the last quarterly period that former President Donald Trump — one of Twitter’s most prolific and problematic power users — was still on the platform. Trump, who last had more than 88 million followers, was permanently banned by Twitter on Jan. 8 after the deadly attack on the U.S. Capitol by pro-Trump rioters and Trump’s tweets that the company said violated its ban on inciting violence. Twitter’s Trump ban could depress the social network’s user growth heading into 2021.
For Q1 2021, Twitter said it expects total revenue to be between $940 million and $1.04 billion, and operating income to be between a loss of $50 million and break even. For Q1 2021, Wall Street analysts had been forecasting revenue of about $965 million.
“2020 was an extraordinary year for Twitter. We are more proud than ever to serve the public conversation, especially in these unprecedented times,” Twitter chief Jack Dorsey said in announcing the earnings. “Our product changes to date are promoting healthier conversations for those who use our service, including advertisers and partners, and we are excited about our plans to continue innovating in 2021.”
In a research note ahead of the results, Wedbush Securities analyst Michael Pachter said he expected a slowdown in user growth in Q4, citing Twitter’s purge of QAnon accounts among factors that “may have triggered defections by more ardent Trump supporters, offsetting any growth that occurred during the quarter.”