Twitter (TWTR) is set to report Q1 results tonight after the close with a conference call to follow at 5pm ET.

Current consensus stands at EPS of $0.10 on Revenues of $607 mln.

Key Metrics

  • Monthly Active Users (MAUs)- 320 mln at the end of Q4 which was flat q/q and +9% y/y. Co made positive comments on January which has the market looking for an uptick q/q. In order to maintain the 9% y/y growth TWTR would need to hit 335 MAUs (1Q15 came in at 308 mln).
  • Advertising Revenue- $641 mln in Q4 which was an increase of 48% y/y; Q3 was $513 mln which was up 60% y/y. The slow down in Ad revenue growth was a cause for concern.
  • Mobile Advertising revenue- 86% of revenues in Q4 which was steady when compared to Q3.

Guidance

  • TWTR guided for Q1 revenues in the range of $595-610 mln (Capital IQ consensus at the time was $629 mln); Q1 EBITDA expected to be in the range of $150-160 mln.
  • FY16 CapEx is expected to be in the range of $300-425 mln; Adjusted EBITDA margin is expected to be in the range of 25-27%.

MAU Commentary from Q1 call

  • Co said it saw a rebound in MAUs in January. The rebound was due to three important components. It was seeing an increase in new users at the top of the funnel. It was also seeing an increase in resurrected users to the top of the funnel. And it saw a continued improvement in retention within the funnel.
  • The first quarter is a seasonally strong quarter. There's typically more opportunity to drive organic growth.
  • In Q4 daily active users were flat sequentially but saw stability in January
  • The retention rate in Q4 increased relative to Q3.
  • DAUs were flat in the fourth quarter, which is a clear signal that the users that it lost from the MAU perspective are not as high quality as it's DAUs since that number wasn't impacted.
Buy

Click "Buy" to purchase the in depth trade packet including implied volatility and trades.