Leadership change has not affected its progress toward meeting 2023’s goals
Change at the top did not hurt the top line at Twitter, as the company reported total revenue of $1.57 billion in the fourth quarter of 2021, up 22% from the same period in 2020, and $5.08 billion for the full year, up 37% from the 2020 total.
While Twitter did not experience the sort of upheaval in the executive ranks that took place at Meta, longtime CEO Jack Dorsey resigned late last November. The reins were handed to then-chief technology officer Parag Agrawal, who implemented a major reorganization in early December.
Total advertising revenue was $1.41 billion for the quarter, up 22% year over year, with the U.S. accounting for $785 million (up 21%) and international for $628 million (up 24%).
“Our strong 2021 performance positions us to improve execution and deliver on our 2023 goals,” Agrawal said in a statement. “We are more focused and better organized to deliver improved personalization and selection for our audience, partners and advertisers.”
Revenue impact associated with Apple’s App Tracking Transparency privacy updates to its iOS operating system remained modest in the fourth quarter, and it expects the same in the first quarter of this year.
Direct-response revenue grew at a quicker rate than overall ad revenue during the fourth quarter, reflecting strong performance in higher cost-per-install categories such as cryptocurrency, gambling and retail.
The company added that while large and mid-tier advertisers continued to represent a “sizable majority” of its revenue, it saw a strong contribution from small and midsized businesses during the fourth quarter, pegging them as “a significant opportunity.”
Twitter foresees performance ad revenue growing at a quicker clip than brand revenue in 2022, bringing the 2021 ratio of 85% brand and 15% direct response closer to its long-term goal of a 50-50 split.
Total ad engagements on its platform fell 12% year over year in the fourth quarter due to a shift toward lower-funnel ad formats and 15-second video views, which have higher cost per engagement but lower engagement rates.
CPE rose 39% compared with the fourth quarter of 2020, which the company attributed to the shift mentioned above, as well as the impact of the pandemic.
Twitter reported a net loss of $221 million for 2021 down from $1.14 billion in 2020.
The company tallied 217 million monetizable daily active users as of last Dec. 31, up 13% from the previous year, with the U.S. total rising 2%, to 38 million, and international climbing by 15%, to 179 million.
Twitter said in its shareholder letter that it made “meaningful progress” last year toward meeting the goals it set for year-end 2023 of at least 315 million mDAU and $7.5 billion in full-year revenue.
“Much of our consumer product strategy is designed to strengthen Twitter’s personalization and selection,” the company wrote. “We are improving personalization by better understanding customer interests through advanced machine learning and building products like followable Topics. To improve selection, we are building an entire portfolio of products that enable content creators, publishers and businesses of all sizes to build and connect with their audience on Twitter using Spaces, Communities, Super Follows, Tipping, newsletters, professional accounts, shopping, commerce and more.”
Making shopping more seamless
Forrester principal analyst Kelsey Chickering told Adweek, “The platform is trying to monetize all pieces of the customer lifecycle, with particular growth in the ‘buy’ phase. All of the major social platforms are making an effort to create new social commerce products, and Twitter is no exception. The shopping lifecycle for consumers is now compressed with the emergence of these new products, and social platforms have the opportunity to make the online shopping experience even more seamless.”
Twitter said it expects total revenue for the first quarter of 2022 to fall between $1.17 billion and $1.27 billion, with a GAAP (generally accepted accounting principles) net loss of $175 million to $225 million.
For the full year, the company sees revenue growth in the low-20% to mid-20% range.
Chief financial officer Ned Segal said in a statement, “Our increased focus on performance ads and the SMB opportunity after the sale of MoPub positions us even better for 2022 and beyond.”
The company also revealed that its board of directors approved a new $4 billion share repurchase authorization, with plans to enter into a $2 billion accelerated share repurchase and buy back the remaining $2 billion over time.
