Twitter tempers growth expectations as it plots a future without Trump

In its first earnings report since it booted former President Trump from its platform, Twitter Inc. revealed lower-than-expected user growth for the fourth quarter of 2020—and it warned that growth will continue to slow this year.

Monetizable daily active users, the metric Twitter uses to measure the size of its base, were up 27% to 192 million, which is slightly below the 193.5 million that analysts were expecting.

At the same time, Twitter’s financial picture is healthier than ever, with fourth-quarter revenue of $1.29 billion versus expectations of $1.19 billion, according to a consensus cited by CNBC. Earnings per share were 38 cents, compared to 31 cents expected.

Advertising revenue, where Twitter makes most of its money, was up 31% for the quarter.

But the social network warned that the pandemic-driven growth it experienced in 2020 will inevitably fall back to earth this year.

In the letter, Twitter also acknowledged that some of the changes it instituted in the run-up to the 2020 election—notably, temporary ones meant to curb misinformation—had a negative impact on its user numbers. Those changes were seen as a departure of sorts for a platform that had traditionally allowed misinformation to spread unchecked. Twitter called the hit “well worth the effort to protect the integrity of the conversation around the election period in the US.”

Twitter’s decision to permanently ban Trump in the wake of the Capitol Hill riots happened after the end of the fourth quarter, but analysts say the site’s broader crackdowns will be felt in the months ahead.

“Q1 2021 might see some user growth fall off due to Twitter’s removal of accounts and defections from those who oppose the account bans,” Nazmul Islam, an analyst with eMarketer, said in an emailed statement. “However, advertising spend should remain strong from both brand and direct response with twitter’s continued investment in their infrastructure.”

Twitter shares were up almost 4% in after-hours trading. You can check out the full report here.