In a revised Q1 revenue guidance on Monday, Twitter said that it expects to post an operating loss during the current quarter in spite of increased traffic. In an official statement, the company’s Chief Financial Officer, Ned Segal, said that the outbreak has reduced ad revenues even as the company reported more daily active users (DAUs) with more and more people turning to social media for news, entertainment and conversations as they stay indoors in line with social distancing guidelines.
“The COVID-19 impact began in Asia, and as it unfolded into a global pandemic, it has impacted Twitter’s advertising revenue globally more significantly in the last few weeks”, Segal said. According to him, many advertisers have reduced their marketing budgets to rein in costs because of the prevailing uncertainty related to COVID-19, while others are hesitant to advertise alongside coronavirus discussions for fear of possible negative repercussions.
Twitter is scheduled to announce its Q1 results on April 30, but as per the revised revenue guidance released Monday, the company’s first quarter earnings will be down on a year-over-year basis. Before the coronavirus situation turned into a full-blown pandemic, the company had estimated revenue to be between $825 million and $885 million, an increase of 8.6 percent from a year earlier.
Even as its revenues take a hit, Twitter is seeing its total users increase significantly as more people turn to social media to discuss their thoughts about the disease. According to Twitter’s co-founder and CEO, Jack Dorsey, the company’s total monetizable daily active users (mDAU) jumped 23 percent to 164 million quarter-to-date, driven largely by conversations surrounding COVID-19. “We’re seeing a meaningful increase in people using Twitter”, he said.