Twitter Retracts Earnings Forecasts Amid Coronavirus Pandemic

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Twitter CEO Jack Dorsey

The social media giant, led by CEO Jack Dorsey, now expects to post lower first-quarter revenues and an overall operating loss.

Twitter on Monday withdrew its revenue and operating income forecasts for the first quarter of 2020 amid the coronavirus pandemic.

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.