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Twitter, which this week accepted a deal to go private in a $44 billion sale to Elon Musk, reported income a touch lighter than Wall Street predicated in the first quarter of 2022. But the social network blew away forecasts on earnings and pulled in more users than analysts expected.
Q1 revenue was $1.20 billion, up 16% year-over-year, reflecting “headwinds associated with the war in Ukraine,” according to Twitter. Net income came in at $513 million, representing diluted earnings per share of 61 cents.
Twitter boosted daily average monetizable daily active usage — its proprietary metric it calls “mDAU” — to 229.0 million for Q1, up 16% versus Q1 in the prior year and a sequential net gain of 14.3 million. Average U.S. mDAUs were 39.6 million for Q1, up 6.4% compared to Q1 of the prior year (and up from 37.5 million in Q4).
Wall Street on average expected Twitter to report $1.22 billion in revenue and earnings of 3 cents per share, according to Refinitiv. Analysts were looking for 226.9 million monetizable DAUs in Q1, per StreetAccount.
After agreeing to the Musk deal on Monday, Twitter canceled its previously scheduled Q1 earnings call.
“Given the pending acquisition of Twitter by Elon Musk, we will not be providing any forward looking guidance, and are withdrawing all previously provided goals and outlook,” the company said Thursday.
Twitter’s stock closed at $48.64/share Wednesday — 10% below the $54.20/share buyout price offered by Musk. That gap indicates some investor belief that Musk’s deal for Twitter could potentially be blocked by regulators or otherwise fail to be consummated. The terms of the agreement include a $1 billion breakup fee if either side backs out.
Twitter was backed into a corner by Musk, who within a whirlwind span of three weeks went from disclosing a 9.2% stake in the company to making a $44 billion unsolicited bid after securing financing for the massive deal — one the board effectively was forced to accept on April 25 in the absence of other options.
Musk, the mercurial tech titan who heads Tesla and SpaceX, has said he wants to allow more free-wheeling speech on Twitter, raising fears the mega-billionaire could weaken the company’s policies banning misinformation and hate speech. He also wants to push Twitter toward a subscription model, away from advertising, as well as enact changes including authenticating “all human” users, open-sourcing Twitter’s algorithms “to increase trust” and encrypting DMs like Signal.
Truth Social, Donald Trump’s rival social startup, “exists because Twitter censored free speech,” Musk posted on Twitter Wednesday.
Under the terms of the agreement, Musk is barred from posting tweets that “disparage” the social network or its employees. On Tuesday, Musk criticized Twitter’s top lawyer, Vijaya Gadde, for the 2020 decision to freeze the account of the New York Post, after the paper published stories about Hunter Biden based on documents culled from a laptop (later verified to belong to Biden).
“Suspending the Twitter account of a major news organization for publishing a truthful story was obviously incredibly inappropriate,” Musk tweeted. He later posted a meme with Gadde’s face, mocking Twitter’s supposed “left-wing bias.”
In announcing Q1 results, Twitter restated its mDAU counts going back to the first quarter of 2019 — saying that because of an error in an account-linking feature it launched in March 2019, it had overstated user figures from Q1 2019 through Q4 2021. “Note that recast data is not available prior to Q4’20 due to data retention policies, but our estimates suggest the prior period adjustments are not likely to be greater than those in Q4’20,” the company said.
Here are the restated user figures, in millions:
Variety's Todd Spangler contributed to this post.