The microblogging site, Twitter Inc on Thursday published a lower-than-expected profit as expenditures were high. However, it said it largely evaded the impact of privacy changes that are harming Facebook parent Meta Platforms Inc.
One week earlier, Facebook’s parent company Meta reported that Apple Inc had introduced some modifications in the ad tracking features.
Twitter faced a hard time in the December quarter along with modifications to Apple’s iOS privacy features. As far as the changes are concerned, app publishers now require explicit permission to assemble and share user data, which has harmed the targeted advertising and pricing that is so essential to Twitter and other social media platforms.
In its fourth-quarter report, Twitter declared a $4 billion stock buyback, which is the first since the company announced a $2 billion program in March 2020. Analysts were anticipating a net profit of $290 million but Twitter posted a net income of only $182 million in comparison to $222 million a year earlier.
Furthermore, the daily user base was expected to rise to 218 million but it remained at 217 million only with an increase of 2.84% from its previous quarter. Twitter’s revenue increased to $1.57 billion in the fourth quarter, up 22% from $1.29 billion a year before. That was broadly in line with the analysts’ estimation of $1.58 billion.
Expenditures in the quarter rose by 35% at $1.4 billion on a year on year basis. Total costs and expenses grew due to an increase in headcount, higher sales-related expenses, infrastructure costs and increased marketing expenses, the company said.
Meta’s stance drove stakes to slip, cutting more than $300 billion from the company’s market cap over the past week, and assembling critical volatility among others in the industry.
According to Twitter chief financial officer Ned Segal, approximately 85% of Twitter’s ad revenue come from brand ads, which are less affected by Apple’s changes than direct-response ads. These changes present Twitter with an opportunity rather than a risk, Segal said. “There’s so much room ahead of us,” he added.
The shares of the social networking site were at $37.83 with a 5.11% hike today.