Twitter CFO Talks 2020 Outlook

Twitter CFO Talks 2020 Outlook

  • Twitter reported Thursday morning fourth quarter and full-year results.
  • Revenue topped $1 billion for the first time.
  • Twitter CFO Ned Segal was interviewed by CNBC and talked what's next.

Social media company Twitter reported Thursday morning fourth quarter results which sent the stock higher by more than 15%. Investors were particularly encouraged by multiple read-outs, including revenue exceeding $1 billion for the first time and monetizable daily active users coming in 4 million better than expected at 152 million.

Following the report, Twitter CFO Ned Segal was a guest on CNBC’s “Squawk Box” segment to discuss what’s next for the company.

The Big Question: Margins

Twitter’s earnings report was accompanied with a cautious outlook for 2020. The social media company plans on spending 20% more money throughout 2020 on headcount, a new data center, and other initiatives to improve the product and grow revenue. Investors were looking for some sort of reassurance this is the right strategy.

Segal highlighted Thursday’s report in which monetizable daily active users grew by 21% for the year and total user count grew by 26 million users. He said that more than half of all new users were initially tied to product improvements and this gives management more confidence to execute on a strategy that is showing results.

On top of product improvement, Twitter will focus on investing in its revenue-generating products into 2020, he said.

Two Revenue Generating Projects

Twitter is working on completing two products that will help generate incremental revenue, the CFO said. First is a new core advertising server which will help the company move faster in delivering great ads for advertisers.

Second, a mobile application ad format that will give Twitter a better path to more direct response advertising over time.

Helping Users Find Information

Twitter’s core purpose of helping people find the information they are looking for remains the same. Management is making it easier by focusing more on following topics, rather than accounts. In fact, there are more than 1,700 live topics users can follow in real-time.

Dorsey’s Moving To Africa

Twitter CEO and co-founder Jack Dorsey announced last year he wants to move to Africa. Naturally, this leaves many investors with many questions to ask, including how will he oversee the company.

Segal said Twitter’s executive team has been dispensed for some time. In fact, Dorsey worked out of 30 different U.S. Twitter offices in 2019 and was joined by some other executives during certain trips.

“We are used to running distributed, so this won’t be much change for us,” he said. 

On his end, Dorsey said during a call with analysts Thursday morning he believes a concentration in the capital of technology, San Francisco, is “not serving us any longer.”

“We will strive to be a far more distributed workforce which we will use to improve our execution,” the CEO said.

By Jayson Derrick
Jayson Derrick has been writing professionally about stocks since 2011. He is particularly interested in alternative investments, hedge funds, and activist investing. He is a big fan of NHL hockey and lives in Montreal, Canada with his wife and four year old daughter.

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