Twitter earnings show a still-small company trying to keep up with the big kids

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In its first-ever earnings report, Twitter has clocked $243 million in revenue for the final quarter of 2013 as well as $665 million for the past year.

We had been hearing that we should expect “hundreds of millions” in quarterly revenue from Twitter insiders, and today’s report confirmed that. If the company continues like this, 2014 will be the company’s first billion-dollar year.

Twitter’s Q4 in news

In a statement on the news, Twitter CEO Dick Costolo said, “Twitter finished a great year with our strongest financial quarter to date. We are the only platform that is public, [in] real time, conversational, and widely distributed, and I’m excited by the number of initiatives we have underway to further build upon the Twitter experience.”

While we take exception to the company’s claim to be the “only” platform in this category, we have to hand it to Costolo for leading the company in a more business-minded direction during his tenure as CEO.

The company also said that for the first quarter of 2014, “Revenue is projected to be in the range of $230 million to $240 million.” For the full 2014 year, Twitter expects to earn a bit more than $1 billion.

In other words, the company is projecting relatively small revenue growth relative to Q4 2013. For the full year, $1 billion in revenue would represent an increase of about 50 percent over 2013.

Questions about the long-term growth of the San Francisco-based microblogging company and its capability to compete with, say, Facebook persist, says Macquarie Securities senior analyst Ben Schachter.

“They’re still working to clarify their strategy,” Schachter said today from New York.

The company’s war chest currently weighs in at $2.2 billion, up from a pre-IPO $321 million.

The company launched its IPO in November. Its successful public offering was in stark contrast to Facebook’s tumultous IPO in 2012. Twitter raised $1.8 billion during the launch and now has 500 million registered users, including 240 million monthly active accounts; together those users post well over 300 million Tweets every day.

Twitter’s stock price closed at $66.32 a share yesterday.

Twitter makes most of its revenues through sponsored messages or “promoted tweets.” Versatility with this model dovetails nicely because of the diversity of Twitter users, from tech CEOs, venture capitalists, retailers, big box chains, and Chechen warlords to me and you. It’s this versatility that makes it attractive to advertisers.

Perspective

Let’s put this in some context. When you compare Twitter’s revenue — or heck, even just its growth in users — to that of its competitors, it’s all small potatoes.

Google is obviously the monster in online as well as mobile ads. Facebook comes in a distant second. Twitter lags lags behind YouTube and Microsoft — yeah, Microsoft.

As for year-over-year growth, Twitter obviously had a meteoric start, rising from, you know, zero income, like a startup do, to any income. But that growth is already tapering off and should be in a normal range by the end of this year.

Here’s what we’re talking about:

Stock price

Here’s a look on how Twitter’s volatile stock price has faired over the quarter as compared to other tech companies, shown as percentage change and in standalone dollars.

GOOG Chart

GOOG data by YCharts

TWTR Chart

TWTR data by YCharts

More about the companies and people from this article:

Twitter is a real-time information network that connects you to the latest information about what you find interesting. Simply find the public streams you find most compelling and follow the conversations. At the heart of Twitter ar... read more »

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