Earlier this year, Twitter provided analysts with its financial guidance for the first quarter of 2020, predicting revenue of between $825m and $885m, and operating income between $0m and $30m. Yesterday, though, Twitter withdrew that guidance, due to the coronavirus pandemic.
“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… reduced expenses resulting from COVID-19 disruption are unlikely to fully offset the revenue impact of the pandemic in Q1”.
In other words: ad revenues are down, even though usage of Twitter is actually up sharply: the service is averaging ‘monetisable daily active users’ (its preferred metric) of 164 million so far this quarter, up by 23% year-on-year, and 8% quarter-on-quarter. In other words: 12 million more people are using Twitter on a daily basis at the moment than in the last quarter of 2019. The revenue impact is the key thing though: what will be the scale of any similar corona-driven challenges for ad-supported services from Spotify and Pandora to YouTube?