Twitter: Advertisement Revenue Drops

Twitter, Inc. released its 2Q 2020 results on July 23, 2020. Revenue fell 19% y-o-y to $683 million and non-GAAP EPS were ($0.16) missed the analyst’s median estimates by $0.16. The company’s adjusted net loss was $127 million. The results were a bit disappointing as they were negatively impacted by lower ad spending. Ad revenues were down 23% y-o-y to $562 million. The company attributed the disruption of the global economy due to the coronavirus and the U.S. protests. Companies will reduce the advertisement budget as they prepare for lower revenues due to COVID-19. This will be a huge blow to Twitter as it derived 82% of 2Q 2020 revenue from advertisements. The company is looking to reduce its dependence on advertisements and might look for a subscription model. Well, not everything was bad for the company in its 2Q report. The company’s product is doing very well. The company was able to grow its mDAU to 186 million, a 34% y-o-y increase in 2Q. This is the highest ever quarterly y-o-y growth since the company started reporting mDAU. The company has cash and short-term investments of $7.7 billion. The company has a long-term debt of $3.4 billion. It had a free cash flow of $40 million in the recent quarter.

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Twitter: Advertisement Revenue Drops

Jul 26, 2020

bearish

fundamentals Analysis

[1 min Read]

Twitter, Inc. released its 2Q 2020 results on July 23, 2020. Revenue fell 19% y-o-y to $683 million and non-GAAP EPS were ($0.16) missed the analyst’s median estimates by $0.16. The company’s adjusted net loss was $127 million. The results were a bit disappointing as they were negatively impacted by lower ad spending. Ad revenues were down 23% y-o-y to $562 million. The company attributed the disruption of the global economy due to the coronavirus and the U.S. protests. Companies will reduce the advertisement budget as they prepare for lower revenues due to COVID-19. This will be a huge blow to Twitter as it derived 82% of 2Q 2020 revenue from advertisements. The company is looking to reduce its dependence on advertisements and might look for a subscription model. Well, not everything was bad for the company in its 2Q report. The company’s product is doing very well. The company was able to grow its mDAU to 186 million, a 34% y-o-y increase in 2Q. This is the highest ever quarterly y-o-y growth since the company started reporting mDAU. The company has cash and short-term investments of $7.7 billion. The company has a long-term debt of $3.4 billion. It had a free cash flow of $40 million in the recent quarter.
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TWTR

Twitter, Inc.

38.29

0.06
0.16%

Return

-2.00%
Change % Since Posting
-0.75
Change Since Posting
37.54
Price When Posted

Metrics

33.00
Target Price
8/ 10
Confidence
1-2 Weeks
Timeframe
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Financials
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Management
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