Twitter CEO and co-founder Jack Dorsey gestures while interacting with students at the Indian Institute of Technology (IIT) in New Delhi on November 12, 2018.
Prakash Singh | AFP | Getty Images
Twitter on Monday pulled its first quarter guidance due to the growing impact of the COVID-19 pandemic, blaming the virus for causing a slowdown in advertising in recent weeks.
The company said its first quarter will be down versus the year-ago quarter and it expects a GAAP operating loss. But on the brighter side, the company said users are still growing as people tune into the site for the latest updates on the coronavirus.
“While the near-term financial impact of this pandemic is rapidly evolving and difficult to measure, based on current visibility, the company expects Q1 revenue to be down slightly on a year-over-year basis,” the company said in a press release. “Twitter also expects to incur a GAAP operating loss, as reduced expenses resulting from COVID-19 disruption are unlikely to fully offset the revenue impact of the pandemic in Q1.”
The company had predicted between $825 million and $885 million for its first quarter revenue. Twitter said Monday it will provide an update on its first quarter 2020 earnings call on April 30.
Shares of Twitter fell more than 2% in after hours trading following the announcement.
Twitter’s Chief Financial Officer Ned Segal said the coronavirus has impacted Twitter’s advertising revenue globally “more significantly in the last few weeks” as it spread into a pandemic.
“We have made solid progress on our consumer and revenue product priorities and we remain confident in our opportunity and strategy. We hope everyone stays healthy and safe,” Segal said in a statement.
Twitter added that the company has seen an increase in total monetizable daily active users, which is the company’s key metric. The company said its quarter-to-date average of monetizable daily active users has reached 164 million, up 23% from its fiscal first quarter in 2019 and up 8% from its fourth quarter in 2019.
Several companies have warned about the financial impacts of COVID-19. Microsoft lowered its guidance for the segment that includes Windows on Feb. 26, just after Apple said it did not expect to reach its own quarterly revenue guidance due to the fast-spreading virus. PayPal also warned in late February that the virus will have a negative impact on first quarter revenue expectations.