Twitter Inc ( TWTR) is set to report results for the third quarter of its 2014 fiscal year (3QFY14) on Monday. Here is what most investors need to look out for:
The Street's Expectations
According to analysts' estimate, Twitter will generate revenue close to $351 million and an EBITDA of $52.6 million, with adjusted earnings per share (EPS) expected to be $0.01. The estimates are significantly above the guidance given by Twitter itself. The San Francisco, CA-based company said last quarter that it expects revenue to fall in the $330-340 million range and an adjusted EBITDA in the $40-$50 million range for 3Q.
The high estimates come on the back of strong earnings last quarter, which saw the company post revenue of $312 million compared to analysts' estimate of $282 million. As a result, Twitter's stock had gained 22% that day. But the surge in performance during the quarter was attributed to increased engagement and user activity on Twitter's social media platform because of the FIFA World Cup; many analysts believe Twitter will not be able to follow with a similar performance.
Revenue Segments and Fabric
Twitter earns close to 90% of its revenue from the advertising service segment. The social media company offers users services like promoted accounts, promoted tweets, and promoted trends, while also allowing them to target their advertisements based on its information database. Twitter stores a variety of user information (interests, location, keywords, and geographic location) that helps marketers target their advertisements.
However, analysts are increasingly voicing concerns about Twitter's dependence on a single revenue stream. So it not surprising that Twitter shares are still down 17% year-to-date despite the surge after the company reported its earnings last quarter.
The management seems to have realized this weakness and the company is looking to become more than just a microblogging platform. It now hopes that it's recently released software development kit (SDK), Fabric, will expand the company's revenue stream. Twitter's Vice President of Revenue Products Kevin Weil is also confident Fabric will expand the company's frontiers. Speaking at Twitter's first mobile development conference in four years- Flight- Mr. Weil said, 'It's Twitter becoming a mobile services company-a company that provides services to mobile developers to power every mobile application on every major platform. It's a new stage for the company.'
Twitter Fabric also puts the social media company in direct contention with the likes of Amazon.com ( AMZN) and Google, Inc. ( GOOGL), in addition to arch rival Facebook Inc ( FB).
Acquisitions
Twitter has only made one acquisition since it reported its last quarterly earnings; it acquired the password security application Mitro Labs in August. While Twitter has scrapped Mitro Labs' flagship product, it has retained its extremely talented team to enhance its geo-location services.
Page 1 of 2
Tidak ada komentar :
Posting Komentar