Twitter announced on Thursday ambitious goals to double both its user base and revenues over the next two years, milestones its finance chief said he thinks the company is more than capable of meeting.
The social media company said it is looking to grow its daily active users to 315 million, up from 152 million at the end of 2019, and reach $7.5 billion on the top line, up from $3.7 billion in 2020, by the end of 2023.
Twitter shares rallied to new highs after the announcement, rising more than 3% despite the broader tech sector suffering its worst trading day since October.
After the close, Twitter CFO Ned Segal told CNBC’s Jim Cramer that the forecast reflects the company’s optimism about its performance in the future.
“We can give big goals like that because we’ve got a lot of confidence in our strategy,” he said in a “Mad Money” interview. “We’ve been executing much faster, and we’ve got a clear path ahead of us with tons of people who still don’t use Twitter and over $150 billion of addressable market for digital ads that can come to Twitter.”
The objectives are aggressive emerging out of the coronavirus pandemic. To meet them, Segal said Twitter will focus on accelerating the release of new products and features, helping to bring in new users and even developing a new subscription model. The company recently announced the acquisition of newsletter platform Revue to allow creators to publish and monetize editorial newsletters.
Twitter, valued as a $59.5 billion company, held an analyst day earlier Thursday to reveal its new outlook and products. Management also teased new features, some that already exist elsewhere in the social media world, that are planned to roll out in the future.
Features being tested include Super Follow subscriptions, where followers can pay for access to exclusive content; Microcommunities, where groups can be formed around a topic, and a new safety mode to allow for automatically blocking and muting accounts that are abusive or sketchy.
In the wake of the growing success of the audio chat room app Clubhouse, Twitter also released its own feature called Spaces.
“This to us feels like a natural extension to where we started with texts. We added images, we added video, live video, audio tweets and now you can go in … and create a space and have a conversation. Other people can join you and others can listen,” Segal said. “People can tweet alongside it. This is going to be a terrific experience.”
While the coronavirus business closures and restrictions were especially hard on brick-and-mortar businesses, Twitter’s service, which is an ad-heavy business, also saw sales slow down.
Twitter posted mid-single-digit growth in 2020, which followed back-to-back years of double-digit sales growth. The company reported $3.7 billion of revenue that year, up 7.4% from $3.46 billion in 2019. As costs and expenses rose last year, Twitter also reported a loss of $1.14 billion, its first annual loss since 2017.
As for the current quarter, Twitter expects to grow revenues by double digits from the year-ago quarter. The company provided revenue guidance of between $940 million and $1 billion.