Twitter ad sales disappoint with slow start to 2021

SAN FRANCISCO: Twitter Inc. posted a sluggish start to the year in its advertising business and gave a disappointing revenue forecast, a sign the social media service hasn’t fully capitalised on the digital advertising boom amid the pandemic like companies such as Facebook Inc. and Google.

Sales were slow during the first months of 2021 after a busy holiday season, and some advertisers pulled back their spending because of the riot at the US Capitol on January 6, company executives said. “When there is unrest for one reason or another,” chief financial officer Ned Segal said on a call with analysts, brand advertisers “often pause when there is a more important conversation than the conversation around their product.”

Revenue gained 28% in the first quarter, in line with analyst estimates, but notably lagging behind the growth at some of Twitter’s digital advertising peers. Facebook and Alphabet Inc.’s Google this week reported quarterly sales that smashed analysts’ estimates, buoyed by businesses pushing commerce and travel, which are expected to bounce back as lockdowns ease.

Twitter said sales will be $980 million to $1.08 billion in the period ending in June. Analysts, on average, projected $1.05 billion, according to data compiled by Bloomberg.

Segal said Twitter saw a rebound in advertising in March, and if that trend continues the company would be on the high end of its guidance.

Twitter also reported that daily active users increased 20% to 199 million, adding 7 million since the previous quarter. The company in February estimated year-over-year growth would be 20% in the March quarter, which was the first period since former US President Donald Trump was banned from the service. Trump was kicked off Twitter on January 6 for repeated violations of the company’s rules, and some analysts were concerned that the former president’s absence might hurt the business.

Revenue was $1.04 billion in the three months ended March 31, matching analysts’ average estimate. Net income was $68 million, or 8 cents a share, compared with a loss of $8.4 million, or 1 cent, in the same quarter a year earlier, the San Franciscobased company said Thursday in a statement.

TWITTER ALSO REPORTED THAT DAILY ACTIVE USERS INCREASED 20% TO 199 MILLION, ADDING 7 MILLION SINCE THE LAST QUARTER