The year has not begun well for technology companies including tech giants such as Alphabet, Apple and Microsoft. Social media players, that are comparatively newer to the Wall Street life, have managed to buck any domain decline trend. This is largely courtesy the growth Facebook and LinkedIn have seen. Twitter, on the other hand, is continuing to see its share of challenges in the first quarter of 2016.
Facebook
Facebook has performed strongly this quarter exceeding any industry expectations. It reported a revenue of USD 5.38 billion which is USD 0.13 billion higher than the expected value. Ad revenue has also been up 57 percent year-over-year. The monthly active users (MAU) for the quarter is reported to be 1.65 billion. Importantly, this quarter 66 percent of Facebook’s MAUs were daily active users, which is up from 65 percent from the same period last year. Facebook has also once again proved that its mobile business is thriving. It had 1.51 billion mobile MAUs, up 21 percent year-over-year, and the company made 82 percent of its advertising revenue from mobile this quarter, versus 73 percent at this time last year.
Twitter
Twitter reported revenue of USD 595 million in the first quarter of 2016, up 36 percent compared with the year-earlier period, but below the analysts’ expectations. Ad revenue of USD 531 million was up to 37 percent year-over-year, and mobile accounted for 88 percent of total ad revenue. The company reported 310 million MAUs at the end of the first quarter of 2016, up from 305 million MAUs at the end of the fourth quarter of 2015.
Despite the company’s efforts to launch two new features to help businesses, direct-message prompts in tweets and Customer Feedback Cards, Twitter reported a GAAP (generally accepted accounting principles) net loss of USD 80 million.
LinkedIn
LinkedIn adjusted first-quarter earnings of USD 860.7 million in revenue. Analysts, meanwhile, had expected LinkedIn to report earnings of about USD 828 million in revenue, according to a consensus estimate from Thomson Reuters.
Wall Street had only expected LinkedIn to report a 30 percent year-over-year increase in quarterly revenue and 5 percent growth in earnings per share over the previously reported figures from the year-ago period. Instead, the company reported 35 percent revenue growth and a 30 percent increase in adjusted earnings on a year-over-year basis.
LinkedIn reported 433 million members in this quarter, an increase of 19 percent. The company saw first-quarter revenue of USD 558 million from ‘Talent Solutions’, USD 154 million from ‘Marketing Solutions’ and USD 149 million from ‘Premium Subscriptions’. Wall Street had expected those figures to come in at USD 539.8 million, USD 142.3 million and USD 142.4 million, respectively, according to StreetAccount.
Facebook and Linkedln performed better than expectations, but Twitter faced mixed results, and saw a steep decline in its share the day following its earnings release. Given the creativity on display and the ever increasing competition between these social networking platforms, the only certainty is that these platforms will keep pushing to ensure growth.
