Canada Markets close in 3 hrs 18 mins
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Will you be forced to pay for Twitter this year?

·Anchor, Editor-at-Large
·3 min read
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Twitter (TWTR) CEO Jack Dorsey isn’t yet ready to tweet out details about the launch date of the platform’s long-rumored subscription product.

“We will continue to build out these teams and to research and also to test on Twitter, and I'm sure you all will see those tests and have the opportunity to participate or observe them. But I wouldn't expect you to see these be meaningful contributors until next year,” Dorsey told analysts about the subscription offering on an earnings call Tuesday evening.

Dorsey continued to play up Twitter’s advertising model, which has powered the company’s top and bottom lines since its inception.

“And so we love talking about subscriptions and the potential and the durability they can provide and predictability to our revenue streams, but we also maintain a big focus around our revenue products,” Dorsey added.

Twitter’s subscription ambitions came to light last summer amid slowing ad revenue during the COVID-19 pandemic.

A push into subscriptions along the lines of Netflix could provide a strong, new recurring revenue stream for Twitter. Ad spending is often viewed as volatile depending on economic conditions, as was the case in 2020. The falloff in ad spending at the height of COVID-19 hampered many companies in the media landscape, not just a social media player like Twitter.

FILE - In this Feb. 8, 2018, file photo, the logo for Twitter is displayed above a trading post on the floor of the New York Stock Exchange. Five technology giants reported mixed earnings results Thursday, Oct. 29, 2020 a sign of varying fortunes as they try to rebound from an pandemic-related economic slowdown earlier this year. While all five — Amazon, Google parent Alphabet, Facebook, Apple and Twitter — exceeded analyst expectations, gloomy forecasts and other uncertainties led to share-price declines for all but Alphabet in after-market trading.   (AP Photo/Richard Drew, File)
FILE - In this Feb. 8, 2018, file photo, the logo for Twitter is displayed above a trading post on the floor of the New York Stock Exchange. Five technology giants reported mixed earnings results Thursday, Oct. 29, 2020 a sign of varying fortunes as they try to rebound from an pandemic-related economic slowdown earlier this year. While all five — Amazon, Google parent Alphabet, Facebook, Apple and Twitter — exceeded analyst expectations, gloomy forecasts and other uncertainties led to share-price declines for all but Alphabet in after-market trading. (AP Photo/Richard Drew, File)

At least for now, Wall Street is OK with Twitter taking its time on developing the subscription service as the ad model has kicked back into gear.

Shares of Twitter rose 5% in early trading Wednesday as the company beat fourth quarter earnings estimates by 7 cents. Total revenue came in at $1.29 billion, eclipsing estimates for $1.19 billion. Monetizable daily active users (MDAU) clocked in at 192 million (up 27% year-over-year) versus forecasts for 193.5 million.

Twitter did warn its MDAUs would slow to 20% growth in the first quarter.

“We are incrementally positive on Twitter given 31% year-over-year ad rev growth was 2x higher than the Q3 rate and the fastest since Q1'16, operating margins are likely to expand in FY21 for the first time in three years, and new ad products + the return of brand spend could quadruple the FY21 revenue growth rate vs. FY20,” said Jefferies analyst Brent Thill.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

Find the latest in business and finance news here.

What’s hot from Sozzi:

Watch Yahoo Finance’s live programming on Verizon FIOS channel 604, Apple TV, Amazon Fire TV, Roku, Samsung TV, Pluto TV, and YouTube. Online catch Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, and reddit.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting