"When compared to the nightmare quarter of SNAP last night, it shows digital ad spending is not falling off a cliff."
From a note to Wedbush clients that landed on my desktop Friday:
This morning Twitter reported its June results with no conference call given the pending Musk deal/October Delaware court battle. 2Q22 revenue came in at $1.18 billion (down 1% y/y) vs. the Street's $1.32 billion expectation due to the advertising industry slowing down and high uncertainty due to the pending lawsuit with Elon Musk.
2Q average mDAUs [million Daily Active Users]came in at 237.8 million vs the Street's expectation of 238.1 million as the average US mDAUs came in at 41.5 million (up 15% y/y) and average international mDAU came in at 196.3 million (up 17% y/y).
Overall we would characterize the DAU metrics as better than feared and holding up relatively firm in this environment. When compared to the nightmare quarter of SNAP last night, it shows digital ad spending is not falling off a cliff like feared which is a positive for others in the space such as Facebook, Pinterest, and Google.
Adj. EBITDA of $111.7 million was well below the Street's consensus of $288.0 million while non-GAAP EPS of ($0.35) was well below the consensus estimate of $0.14. We note costs related to the Twitter acquisition were $33 million in the quarter.
The stock will continue to trade at fair value plus the odds of a deal or settlement with Musk as the court case in Delaware looms in October. We believe Twitter has a clear upper hand legally speaking as the Street is now factoring in at a minimum a major cash settlement from Musk into the stock ($5 billion-$10 billion range) or potentially Musk ultimately still buying Twitter at the $54.20/$44 billion if the Delaware court upholds this deal.
Maintains NEUTRAL rating.
My take: Results delivered without a conference call is a bad look.
Thanks for supplying an Apple connection, and a good one at that!
It just occurred to me that this very issue – the impact of Apple making it much harder to steal user’s personal information – may be behind some of the big explosion in China’s purchasing of iPhones of late. Apple is well known to be superior when it comes to protecting user information, and with the big crackdown in China, folks may be taking advantage there.
The same in Russia, of course. And with the “relationship” between Russia and China still intact, a lot of these iPhones could well be heading to the black market in Russia….
I wasn’t questioning PED’s right to print anything he wants. I was literally asking why he’s printing a story about Twitter, and if there’s an Apple connection I was missing.
But since you brought the subject up, we are often trying hard to keep our focus here on Apple. It could be said to undercut that effort if the site leader doesn’t himself stick to the same rules.
Do you disagree?
Re: “I wasn’t questioning PED’s right to print anything he wants.” Of course you weren’t – that goes without saying!
Re: “keep[ing] our focus here on Apple…” That is the certainly the primary focus here, but as we all know, sometimes PED sneaks in a post where the Apple connection is secondary or even somewhat nebulous. I trust PED’s judgement enough to make the decisions on what he chooses to publish, knowing full well that a cadre of well-informed commentators will quickly rise to add their two cents to the discussion.
TikTok has a mDAU base over 1B now whereas Snap & Twitter reported a combined 585 million daily active users this past quarter. The reports say that Snap & Twitter don’t command & hold “eyeballs” for nearly as long as TikTok where recent analysis by “Similarweb” suggested that TikTok users spent an average of 1 hour & 22 minutes daily on the app in March, far more than users of Snap (19 minutes) and Twitter (23 minutes).
In summary, the economy seems to be moving fairly well. It’s competition most likely in this instance. Will be most interesting to hear what Cook & Maestri have to say next week about the state-of-the-economy.
What the destiny of that app might be in the future is an open question.
PEDs Journo nose is still in great condition, may it remain so.
But I’d rather see Meta meet its end first, while I get to make wishes.