Twitter will release its Q1 2014 earnings report after the closing bell today (Tuesday), and while the market will be looking for growth in revenue, a strong earnings per share (EPS) number and a boost in ad sales, only one metric really matters: monthly active users (MAU).
In their first post-IPO earnings report (for Q4 2013), Twitter beat analyst expectations for revenue and EPS, but posted an MAU uptick of just 9 million users from Q3 2013 to 241 million monthly actives. Subsequently, the stock tanked.
Here’s my chart, showing Twitter MAUs from Q3 2012 to Q4 2013.
And another that I put together, showing how Twitter’s active user month-on-month growth has fallen sharply since Q1 2013.
Twitter’s shares are already weak going into today’s report, so if that MAU number is flat the price could fall sharply. Personally I think that any number less than 10 million is a problem for Twitter. An MAU total about 250 million is probably marginally bullish as it’s both a milestone and a sign that there’s still growth potential.
Analysts are forecasting $241 million in revenues and an EPS loss of $0.03.