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The social media giant also retracted its outlook for expenses, stock-based compensation, headcount and capital expenditures for the full fiscal year “due to the growing impact of COVID-19 on the global operating and economic environment and their effect on advertiser demand.”
Twitter said the near-term financial impact of the virus outbreak on its bottom line was “rapidly evolving and difficult to measure.” But the company added that its first-quarter revenue will be “down slightly on a year-over-year basis,” and that it will post an overall GAAP operating loss.
The company’s CFO Ned Segal noted that Twitter had a strong start to fiscal 2020, “before the effects of COVID-19 began spreading more broadly, including a successful Super Bowl and overall strength in the U.S.”
He added, “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.”
The revised guidance from Twitter follows the social media giant striking a truce with activist investor Elliott Management that includes tech investor Silver Lake taking a $1 billion stake in Twitter and co-founder and CEO Jack Dorsey remaining at the helm.
Twitter also inked a cooperation agreement with Elliott Management that will see Silver Lake’s investment, together with cash on hand, fund a $2 billion share repurchase program.
Stock in Twitter traded down by 48 cents, or 2 percent, to $24.21 in after-hours trading on Monday. The company expects to release its first-quarter earnings on April 30.
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