With Musk's deal in the wings, Twitter reports Q1 sales of $1.2B; diluted EPS of $0.61 due to a MoPub bump

·4-min read

Twitter will soon be off the market and run as a private company if an acquisitive tech mogul by the name of Elon Musk has his way. But in the meantime, it remains publicly traded, and today the social media platform posted a truncated Q1 earnings statement, providing a degree of transparency into how it is faring as a business.

The short story is that the numbers speak in part to why Twitter might have become an acquisition target. For the quarter that ended March 31, it posted revenues of $1.2 billion, up 16% on the same quarter a year ago -- in the middle of the range based on Twitter's figures but short of analysts' expectations.

Diluted EPS had a huge bump in part because of the MoPub sale: it was $0.61 on net income of $513 million, representing a net margin of 43%. Specifically it had a pre-tax gain of "$970 million from the sale of MoPub for $1.05 billion and income taxes related to the gain of $331 million."

To note: it didn't provide comparative figures were MoPub not factored into the equation. As a point of comparison, a year ago for this quarter Twitter had net income of $68 million, a net margin of 7% and diluted EPS of $0.08.

mDAUs, Twitter's own user metric for measuring its audience ('monetizable daily active users'), was 229 million for the quarter, up 15.9% on a year ago. The earnings report also disclosed a historical detail related to the mDAUs: Twitter had previously been miscounting (and overstating) the number of mDAUs for several quarters, sometimes by as much as 1.9 million users. It published the corrected numbers for several quarters in the statement, as far back as its data retention policies would let it.

Twitter had said it would post these numbers at 7am Eastern; in the event they were published about an hour later.

Per Yahoo figures, analysts were expecting revenues on average of $1.22 billion on an average EPS of $0.03 (but the range was huge for the latter: between $0.15 at the high end through to a loss per share of $0.49). Twitter itself had set guidance of $1.17 billion to $1.27 billion for revenues. It didn't provide guidance for the next quarter in the statement.

The longer story -- one that will only play out in the coming weeks, months and years -- will be whether going private under the ownership of Musk will actually give Twitter the breathing space it needs, away from the gaze of the public markets, to fix what's broken and grow; or whether that might cease to be a priority above others.

There are a lot of question marks around this: for example, what role advertising will play in the business; whether "free speech" as Musk has spelled it out will make the platform a free-for-all for some of the ugliest and worst behavior; whether product changes are sped up or slowed down, and what they will look like, and to which agenda they will be shaped.

Posting before market open, Twitter's stock after the results announcement was up slightly, $0.43 or just under 1% in pre-market trading. To be sure, the company's stock has been on something of a rollercoaster in the last month, as Musk and Twitter first disclosed the mogul buying a 9.2% stake in the company, leading to Musk joining and then not joining the board, then offering to buy the company outright, and then getting his offer conditionally approved by the board. (See a timeline up to the deal getting approved here; catch up on all our Twitter coverage here.)

Through all of that, Twitter's market cap currently is around $37 billion, far below the nearly $44 billion Musk is proposing to pay to take it private.

Notably, we won't get to hear the company in its own words, or fielding questions from bankers and analysts, about its numbers or Musk. Twitter has cancelled today's earnings call, which traditionally follows the earnings statement. "In light of the pending transaction... Twitter will not hold a corresponding conference call," the company noted in an announcement on the day that the Musk offer got approved.

More to come; refresh for updates.

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