Twitter (TWTR) stock drops 10% on lower than expected user growth in Q1 2021

Twitter actually made money during Q1 2021, but shareholders are disappointed in the Daily Active Users numbers. Find out more about their earnings release here.


Twitter just reported their earnings results for Q1 2021. The company has struggled to show consistent growth, but they were able to turn a profit this quarter. Twitter actually beat analyst expectations with 16 cents reported in earnings per share and revenues of $1.04 billion. Both of these were ahead of loftier whisper numbers as well. It appears that not everything was peachy over at the social media company, as they reported lower than expected growth in Daily Active Users (DAUs) during Q1 2021. The stock is currently 10% lower in afterhours trading.

Here is some more interesting information from the Twitter Q1 2021 earnings release:

  • Average monetizeable Daily Active Users (mDAU) reached 199 million, up 20% from the prior year
  • Q1 revenue totaled $1.04 billion, up 28% year over year
  • Q1 net income was $68 million, representing a net margin of 7%
  • Net cash from operating activities - $390 million
  • mDAUs of 199 million were up 7 million from Q4 2020
    • US mDAU were 38 million in Q1 2021
    • International mDAU were 162 million in Q1 2021
  • Q2 2021 outlook
    • Total revenue is expected to be between $980 million and $1.08 billion
    • GAAP operating loss is expected to be between $170 million and $120 million

“People turn to Twitter to see and talk about what’s happening, and we are helping them find their interests more quickly while making it easier to follow and participate in conversations,” said Jack Dorsey, Twitter’s CEO. “Average monetizable DAU (mDAU) reached 199 million, up 20% year over year and up 7 million sequentially, driven by ongoing product improvements and global conversation around current events.”

“Q1 was a solid start to 2021, with total revenue of $1.04 billion up 28% year-over-year, reflecting accelerating year-over-year growth in MAP revenue and brand advertising that improved throughout the quarter,” said Ned Segal, Twitter’s CFO. “Advertisers continue to benefit from updated ad formats, improved measurement, and new brand safety controls, contributing to 32% year-over-year growth in ad revenue in Q1.”

Twitter (TWTR) shares dropped 10% afterhours on the disappointing Q2 guidance and mDAU data.
Twitter (TWTR) shares dropped 10% afterhours on the disappointing Q2 guidance and mDAU data.

Twitter (TWTR) shares dropped 10% in afterhours trading on the news that user growth wasn't as impressive as Wall Street had expected. The Q2 2021 guidance of an operating loss is also a data point that is scaring some traders out of the stock. Many companies are seeing momentum building going into the economic reopening, so Twitter's guidance may be indicative of bigger problems ahead for the company. Facebook just reported a massive 2.85 billion monthly active users number yesterday, so Twitter is looking pretty weak in comparison today.

Do you use Twitter? Do you think social media is stupid? Are you thinking about investing in the stock? Let us know in the Shacknews Chatty comments section below.

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From The Chatty
  • reply
    April 29, 2021 1:50 PM

    Captain Business posted a new article, Twitter (TWTR) stock drops 10% on lower than expected user growth in Q1 2021

    • reply
      April 29, 2021 1:53 PM

      what company has a bigger delta between product market fit and management quality? Incredible that the board continues to tolerate a part time CEO who's done such a poor job for so long. At least the new head of product has managed to teach the company how to ship features for once.

      • reply
        April 29, 2021 2:30 PM

        Prof Scott Galloway? That you?

        • reply
          April 29, 2021 2:35 PM

          imagine having a company that is like the center of the worldwide news/sports ecosystem and failing to monetize or grow it effectively for decades

          imagine watching Twitch and livestreaming explode after you cancelled your own livestreaming product that was the talk of the town before them

          imagine watching short form video explode into the biggest new category in social media after you cancelled your own short form video product that was the talk of the town before them

          just incredible mismanagement for so long

          • reply
            April 29, 2021 2:36 PM

            And vine. Rip

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            April 29, 2021 2:48 PM

            Seriously, Tik Tok is growing even faster than YouTube, it's a phenomenon.

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              April 29, 2021 2:54 PM

              yeah I mean it's an imperfect comparison because TikTok had an unfair advantage to bootstrap their network compared to most (the Chinese government giving them access to billions of consumers who couldn't use Twitter/YouTube/etc) but it's still an indictment of Twitter to have literally had the product category in their org and then not only to fail to make it big but to actually straight up shut it down.

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      April 29, 2021 2:52 PM

      How much of their previous “growth” was due to the proliferation of Russian bots?

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        April 29, 2021 2:57 PM

        why would you think Russia bots make up an appreciable number of accounts relative to their overall size? and even if you believe that what makes you think they've recently cracked down on such bot accounts?

        the problems with Twitter's growth is poor product design/execution for decades that made it unappealing to actual humans, that's why its usage and monetization is anemic compared to Facebook, YouTube and other networks which have plenty of bots on them too.

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          April 29, 2021 3:09 PM

          Well, there have been innumerable articles guessing at the percentage of accounts that are fictitious, and it is certainly a non-negligible number. We also know that Twitter continually works at blocking bot accounts and preventing them from being created in the first place. So maybe they’ve become too good at it for their own good!

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