Twitter unveiled a $4 billion share buyback plan after posted modestly weaker-than-expected fourth quarter earnings and muted U.S. user growth.
Twitter (TWTR) – Get Twitter, Inc. Report shares powered higher Thursday after the micro-blogging website said it would buyback $4 billion in stock after posted softer-than-expected fourth quarter earnings.
Twitter said non-GAAP earnings for the three months ending in December were pegged at 33 cents per share, down 13.1% from the same period last year and 2 cents shy of the Street consensus forecast. Group revenues rose 22% to $1.57 billion, matching Street forecasts, with $1.47 billion coming from its advertising division.
Twitter said average monetizable daily active users, its term for the number of daily users who can view ads, rose 2.8% from the September quarter to 217 million, but that figure only included a 1 million gain of U.S.-based users.
Looking into the coming year, Twitter said it sees revenue growth in the “low to mid 20% range” and held onto its 2021 guidance that sees $7.5 billion in revenues and 315 million daily active users by 2023.
“Our strong 2021 performance positions us to improve execution and deliver on our 2023 goals,” said new CEO Parag Agrawal. “We are more focused and better organized to deliver improved personalization and selection for our audience, partners, and advertisers.”
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Twitter shares were marked 3.52% higher in pre-market trading to indicate an opening bell price of $39.15 each.
The new $4 billion buyback replaces a $2 billion arrangement put in place in 2020, the company said, which had around $820 in repurchase power remaining.
“As part of the new program, we intend to enter into a $2 billion accelerated share repurchase (ASR) and repurchase the remaining $2 billion over time,” Twitter said. “We will continuously evaluate efficient alternatives to using cash on hand to fund the program, including accessing the capital markets, subject to market conditions.”
Late last year, Twitter stepped down as CEO of the group to make way for former CTO Parag Agrawal.
Dorsey will remain on the board until at least 2022, the company said, with Bret Taylor becoming independent chairman.
Dorsey, 36, co-founded Twitter in 2006 but was forced out as CEO two years later. He was brought back in 2015, however, in a effort to re-boot growth — and tackle online abuse — amid the social media group’s growing global influence.
“I’ve decided to leave Twitter because I believe the company is ready to move on from its founders,” Dorsey said. “My trust in Parag as Twitter’s CEO is deep. His work over the past 10 years has been transformational. I’m deeply grateful for his skill, heart, and soul. It’s his time to lead.”
