Twitter Inc. Earnings Preview For 1QFY15

Twitter will report its first quarter fiscal year 2015 earnings report on Tuesday April 28 and is expected by analysts to post earnings of $0.4 a share on $456.58 billion of revenue.

Twitter Inc. is all set to report its first quarter fiscal year 2015 earnings results on Tuesday April 28th after market close. The stock of the company has declined by approximately 30% since its last earnings announcement, mainly because of its weakening user growth. In spite of the fact the social media giant did extremely well regarding enhancing its monetization, falling user engagement and the slow pace in adding new users has upset the investors.

Forbes assigned a stock price target of $28 indicating a discount of nearly 40% compared to the market price.

Analysts expect Twitter to report Non-GAAP earnings of 4 cents, which remains unchanged since three months. They also expect revenue of almost $456.58 million compared to company’s guidance of $440 million. Analysts also believe the company will add around 13 million mobile monthly active users (MAUs) and will reach a total figure of 243 million. Regarding average monthly users analysts expects around 14 million.

Analysts provide revenue outlook for second quarter to be around $538.04 million and company future guidance for revenue of complete fiscal year 2015 is $2.3 billion to $2.35 billion.

Twitter announced robust earnings in previous quarter even its user base growth waned. The adjusted EBITDA and revenue surpassed analyst’s expectations. The complete year revenues reached $665 million with adjusted EBITDA reached $75 million. This shows YoY growth of 110% & 257%, respectively. The advertisers are seeing the platform helpful for engaging impending clients, which can be seen from the increase in revenue from ad per 1000 timeline views. The number reached $1.49 for fourth quarter 2014 and represents 75% increase on year over year basis. However, it is expected that numbers will also be stronger for 1QFY15.

Twitter Inc. is still in progression of increasing its ad revenue which means that even at constant subscribers growth, it still have the potential to increase its ad pricing and ad impressions. Resolution Media conducted a study and find out that advertisers spent around 127% more on Facebook than to Twitter in the year 2013, which indicates that there is room for the company to grow. The similar study mentioned that click via rates are more for Twitter. The social media giant company is already working on improvement of numerous products that will support the company to endure the growth of ad revenue.

Goldman Sachs said that Twitter will report a strong earnings for 1QFY15 and stated it carries on to“believe we are in the early stages of a very long growth cycle for Twitter Stock”