On Monday, Twitter pulled its first-quarter revenue outlook and forecast an operating loss as the coronavirus outbreak crimped ad sales, but said the pandemic increased the number of active users on the microblogging platform.
The outbreak has made social media services such as Twitter vital for a broader population than usual, as people look to stay abreast of the latest news from authorities and keep in touch with friends virtually.
Chief Financial Officer Ned Segal said in a statement that “The COVID-19 impact began in Asia, and as it unfolded into a global pandemic, it has impacted Twitter’s advertising revenue globally more significantly in the last few weeks.”
Twitter is the first major ad-supported US platform to reveal the impact of the coronavirus and investors will now look how larger Internet peers Facebook and Alphabet’s Google are coping.
Last week, Facebook Chief Operating Officer Sheryl Sandberg told Bloomberg TV that “This is not going to be business as usual, and the marketing industry is certainly going to see a real impact. I don’t think anyone knows how big. So we’re going to watch and look.”
According to commercials seen by Reuters, Toyota, Hyundai, and GM were among automakers who started to run online ads last week directly or indirectly mentioning how they were adjusting practices because of the coronavirus.
The warning from Twitter comes two weeks after the company reached an agreement with Elliott Management that allowed Jack Dorsey to stay on as chief executive and added three new directors.
Twitter had pledged to grow daily users by 20 percent or more in 2020 and beyond, roughly in line with user growth in its fourth quarter, as part of the agreement.
On Monday, Twitter announced that total monetizable daily active users (mDAU) jumped 23 percent to 164 million quarter-to-date, driven by the conversation around COVID-19, as well as ongoing product improvements.
Dorsey said that “We’re seeing a meaningful increase in people using Twitter,”
The company said it expects first-quarter revenue to be down slightly on a year-over-year basis. It had earlier estimated revenue to be between $825 million and $885 million, an 8.6 percent rise from a year earlier at the midpoint.