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Did Twitter’s Revenue Top Expectations in Q4?

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Revenue growth of 18%

Twitter (TWTR) is scheduled to release its earnings results for the fourth quarter of 2018 on February 7. On Wall Street, the consensus estimate calls for Twitter to report fourth-quarter revenue of $868.6 million, suggesting a rise of more than 18% YoY (year-over-year).

Over the last four years, Twitter has mostly exceeded its fourth-quarter revenue expectations. It reported revenue of $731.6 million in the fourth quarter of 2017, representing an increase of 2.0% YoY. However, its revenue growth was slower than the revenue growths of the majority of its industry peers. Snap (SNAP) and Facebook (FB) grew their revenues 47% and 72% YoY, respectively, in the fourth quarter of 2017. Google’s parent, Alphabet (GOOGL), and Yelp (YELP) reported revenue rises of 24% and 12% YoY, respectively, in the same period.

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Twitter’s fourth-quarter revenue track record

Twitter’s revenue in the fourth quarter of 2017 exceeded analysts’ consensus estimate by $46 million. In the fourth quarter of 2016, Twitter generated revenue of $717 million, missing the consensus estimate by $23 million. In the fourth quarter of 2015, Twitter’s revenue was $710 million, matching the consensus estimate. In the fourth quarter of 2014, Twitter reported revenue of $479 million, exceeding the consensus estimate by $26 million.

Potential growth drivers

Twitter is set to release its results for the fourth quarter of 2018 at a time when the company has been making efforts to reach out to new users and attract more advertisers. In August 2018, Twitter rolled out Twitter Lite, the lightweight version of its social media app, to more countries.

Twitter Lite is designed to work smoothly in cheap smartphones in addition to being data friendly, making it attractive to developing countries with lower consumer incomes and spotty Internet connectivity.

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