The Strategist

Twitter ends second quarter with $ 1.23B loss

07/24/2020 - 06:58

Despite the quarantine and a 12% increase in daily users, Twitter's top financials were negative in the last quarter.

According to the company's report, its revenue in the second quarter of the year was $ 683 million, which is 19% lower than last year. Analysts surveyed by FactSet expected to see this figure at $ 702 million. The company itself explains such a significant reduction by falling ad revenues, as advertisers began to diligently save in the crisis. However, Twitter CFO Ned Segal is confident that the company's work in the advertising space during this time will help it to gain additional value when the market recovers and returns to major marketing events.

A year ago, the company created a deferred tax asset of $ 1.1 billion, recognizing this amount as a tax credit. The company has now funneled these funds into a contingency fund to cover possible losses from the COVID-19 pandemic. As a result of the write-off, Twitter ended the quarter with a net loss of $ 1.23 billion. Without this write-off, the loss of the microblogging service would have amounted to $ 127 million, which is still worse than analysts' forecasts.

Finally, Twitter declined to make a forecast for the second half of this year, citing market conditions changing too quickly amid the COVID-19 pandemic, the duration of which cannot be predicted.