New high

Twitter shares rose after reporting Q4 revenues and profits above Wall Street forecasts. However, Twitter missed expectations for user growth and also reported a 20% increase in staff this year, which will increase total costs by more than 25%. Nevertheless, the company expects revenue growth to accelerate in 2021.

Shares in Twitter (TWTR), up 66.5% over the past year, rose almost 3% after Tuesday's close, hitting a new 52-week high price.

Twitter reported Q4 earnings per share up 52% to $0.38, above analysts' estimate of $0.31. Earnings rose to $222m, up from $119m in the same period a year earlier.

Revenue rose 28% to $1.29 billion, up from an estimate of $1.19 billion.

Meanwhile, Twitter's operating and capital costs also rose, driven by staff growth, investments in data centre infrastructure to support audience growth and investments in innovative products.

Twitter reported adding 5 million monetisable daily active users (mDAUs) for Q4, bringing the number up to 192 million, up 27% year-on-year. However, this is below analysts expectations of 193.5 million, with US mDAUs up 1 million to 37 million for Q4 and the average international mDAU up 4 million to 155 million.

Forecasts from Twitter

Twitter said it expects revenues to grow faster than costs in 2021, given the expected "modest impact" from Apple's upcoming privacy changes in iOS 14. Reporting its quarterly results last month, Facebook (FB) said it expected that Apple's iOS 14 privacy changes could hurt its advertising business.

Twitter's management also warned that it plans to increase headcount by more than 20% this year, resulting in an increase in total costs of more than 25%. Twitter said it expects first-quarter revenue to rise to a range of $940 million to $1.04 billion, an average above analysts' expectations of $965 million.