Fly Intel: What to watch in Twitter earnings report

Twitter (TWTR) is scheduled to report results of its fourth fiscal quarter before the market open on Thursday, February 7, with a conference call scheduled for 8:00 am ET. What to watch: 1. USER METRICS: Twitter's monthly active users, or MAUs, are a closely watched measure of its popularity and growth potential. Last quarter, the company reported global MAUs decreased 2% sequentially to 326M users and 1% year-over-year. Meanwhile the company's U.S. base decreased 2% sequentially to 67M users, a decrease of 3% year-over-year. Along with its Q3 earnings, Twitter guided to a sequential decline in MAUs. "Looking ahead, we expect to see a sequential decline in MAU in Q4 given our ongoing health work, decisions not to renew or move to paid SMS carrier relationships in certain markets, and our decision to allocate resources towards GDPR and health. Based on our current level of visibility, we expect the decline to be mid-single-digit millions of MAU. As a reminder, DAU growth continues to be the best measure of our success in driving the use of Twitter as a daily utility," the company said. 2. AD REVENUE: Key to Twitter's business model is its ability to drive advertisers to the platform. In Q3, the company reported a roughly 29% increase in ad revenue versus last year. "Our third quarter results reflect our success with advertisers, delivering revenue growth of 29 percent and better than expected growth across most products and geographies," said CFO Ned Segal at the time. "We are demonstrating Twitter's unique value proposition for advertisers through innovative ad formats, better relevance and continued improvement in ROI. Advertisers are choosing Twitter to reach the most valuable audience when they are most receptive." 3. NEW FEATURES, UPDATES: Since Jack Dorsey's return as CEO, Twitter has increasingly pivoted into new content such as live-streamed events and sports while tweaking its core product. In October, the company announced it would add new notices to make it easier to see when it has taken enforcement action on a Tweet. "Now, once we've required a Tweet to be deleted, we will display a notice stating that the Tweet is unavailable because it violated the Twitter Rules along with a link to the Rules and an article that provides more detail on how we enforce our rules," Twitter said. Additionally in October, "As we've been saying for a while, we are rethinking everything about the service to ensure we are incentivizing healthy conversation, that includes the like button. We are in the early stages of the work and have no plans to share right now." The company also tweeted, "Activity that attempts to manipulate or disrupt Twitter's service is not allowed. We remove this when we see it. You can now specify what type of spam you're seeing when you report, including fake accounts." In December, Twitter added a new update that permits subscribers to make their timelines show tweets in reverse chronological order. Also in December, The Twitter Safety team said, "Working with our industry peers we identified & suspended a very small number of accounts originating from Bangladesh for engaging in coordinated platform manipulation. Based on our initial analysis, it appears that some of these accounts may have ties to state-sponsored actors."

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