At the beginning of the quarter, the company had announced the sale of its ad platform MoPub for $1.05 billion. When excluding MoPub and MoPub Acquire, year-over-year revenue growth was 22%.
Net income was $513 million, representing a net margin of 43% and diluted EPS of $0.61. Net income of $513 million includes a pre-tax gain of $970 million from the sale of MoPub for $1.05 billion and income taxes related to the gain of $331 million. This compares to net income of $68 million, a net margin of 7% and diluted EPS of $0.08 in the same period of the previous year.
Given the pending acquisition of Twitter by Elon Musk, Twitter did not host a conference call, issue a shareholder letter, or provide financial guidance in conjunction with its first quarter 2022 earnings release.
On Monday, Musk formalised an agreement to buy Twitter for roughly $44 billion, promising a more lenient touch to policing content on the platform with over 200 million users. Upon completion of the transaction, Twitter will become a privately held company.
However, the transaction is subject to customary closing conditions and completion of regulatory review and Twitter’s stockholder approval. The transaction, which is expected to close in 2022, has been approved by the board of directors of Twitter.
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As per the company’s results, the average monetizable daily active usage (mDAU) was 229.0 million for Q1, up 15.9% compared to the same quarter, previous year. Average US mDAU was 39.6 million for Q1, up 6.4% compared to Q1 of the prior year. Average international mDAU was 189.4 million for Q1, up 18.1% compared to Q1 of the prior year.
Costs and expenses totaled $1.33 billion, an increase of 35% year-over-year. This resulted in an operating loss of $128 million and -11% operating margin, compared to an operating income of $52 million or 5% operating margin in the same period of the previous year.
Advertising revenue totaled $1.11 billion, an increase of 23%, or 26% on a constant currency basis. Subscription and other revenue totaled $94 million, a decrease of 31% year-over-year, or a decrease of 5% year-over-year when excluding MoPub from the year ago period.
Interestingly, among the slew of changes that Musk has proposed, one of the most prominent ones is to remove the microblogging site’s dependence on ads. In an exclusive interview with ET, former head of Twitter India and now founder and CEO of ed-tech firm Invact Metaversity said this decision could have serious implications on how teams are organised.
Maheshwari had said there are large ad and sales teams and a large part of the revenue comes from ad sales. “The question is – what happens to that (the ad and sales teams)? And these are profound changes. So, we’ll have to wait and watch how this unfolds and what it really means,” he had said.
