Q4 2021 Twitter Inc Earnings Call
Thank you.
Yes.
Good afternoon.
[music].
Good day, ladies and gentlemen, and welcome to the Twitter fourth quarter 2021 earnings conference call.
At this time all participants are in a listen-only mode. Later, we will conduct a question and answer session.
And instructions will follow at the time.
I would now like to turn the call over to Krista Bessinger VP Investor Relations. Please go ahead.
Hi, everyone and thanks for joining our Q4 earnings conference call.
We have our CEO Parag Agarwal, and CFO, Ned Segal with us today.
We published our shareholder letter on our Investor Relations website, and with the SEC about an hour ago, and we hope that you've had a chance to read it.
As usual, we'll keep our opening remarks brief so that we can get right to your questions.
As a reminder, we will also take questions asked on Twitter. So please tweet us @TwitterIR using the cash tag TW TR.
During this call, we will make forward-looking statements, including statements about our business outlook strategies and long term goals.
These comments are based on our plans predictions and expectations as of today, which may change over time.
Our actual results could differ materially due to a number of risks and uncertainties, including the risk factors in our most recent 10-Q.
And upcoming 10-K to be filed with the SEC.
Also during this call, we will discuss certain non-GAAP financial measures. We have reconciled those to the most directly comparable GAAP financial measures in our shareholder letter.
These non-GAAP measures are not intended to be a substitute for our GAAP results.
And finally, this call in its entirety is being webcast from our Investor Relations website, and an audio replay will be available on Twitter and on our website in a few hours.
And with that, I'd like to turn it over to Parag.
Hello, everyone. Thanks for joining us today.
This is my first earnings call.
I'll step back and talk about the way we are as a company.
[inaudible]. Our strategy.
Our strategy execution.
Our execution.
And what this all means for shareholders.
I'll start with our strategy.
Our purpose is to serve the public conversation.
And Twitter is the best place [to find out what's happening].
We played out.
It is unique and it is a differentiator.
What makes Twitter great?
It's one, the selection of conversation available on that service.
Our broad set of people and content on a range of topics that are relevant for the moment.
And secondly. [inaudible] for your interest? You can instantly find relevant content.
Hey, guys.
And Chris you can instantly find relevant garnered.
Across interest from sports, to investing and [engagement].
The strategy and plans we shared with you about a year ago.
It might be continued strengthening.
These two differentiators.
Around personalization and selection.
And to use these to inform and bring conclusions will work across both our consumer and revenue-focused teams.
Informed and bring conclusions will work across both our consumer and revenue focused teams.
Let me discuss a couple of examples.
First. Our working group personalization includes us developing a better understanding of customer interests.
Our working group with low vision.
US developing a better understanding of customer needs. This summer.
Sometimes to improve machine learning or to build products like following topics.
It also includes us getting better at matching creators and content.
To consumers.
This enables us to create more relevant and personalized products that increase [inaudible] and also enables us to serve more relevant adds.
This enables us to create more relevant and personalized products that increase [inaudible] and also enables us to serve more relevant adds.
And then it's particularly helpful in improving the return on [inaudible] performance oriented advertisers.
Also improving the ads experience for our customers.
Next let's talk about selection.
I wanted to describe.
How several new products [inaudible] at a rapid cadence.
Rapid cadence.
I'm talking about spaces, communities, newsletters professional accounts, create monetization efforts around super follows and [inaudible].
And also what that the shopping and commerce.
All of these coming together to enable an ecosystem of products that enable content creators publishers and businesses of all sizes.
To build and connect with their audience.
Together I believe enable more unique content and more content around the long tail of topics.
Today, we do well when it comes to content of broad interest.
Politics, Sports, Entertainment, music, but these new features will help expand that in the topics being discussed on Twitter.
These will enable opportunities for us to better monetize through more relevant and contextual advertising.
But more importantly, also enable our customers to monetize.
Next, I want to talk about execution.
Because strategy isn't enough.
To deliver outcome, we need to execute.
In my first 10 weeks on the job, I have been focused on improving our execution using 3TP.
<unk> been focused on improving our execution using TTP.
Increased accountability.
Faster decision making and a focus on doing fewer things in pilot.
Can you talk about two specific changes we've made.
First, I've made strategic organizational changes, focusing on creating clarity and ownership in the organization.
I've made at <unk>.
<unk> organizational changes, focusing creating clarity and ownership in the organization.
This enables faster decision making.
And increased accountability.
We are now operating under the GM model. General manager model with cross functional resources for all part development.
And the budget to support operations are owned by GM across consumer, revenue and core technology for responsible for [inaudible]..
Second, we are increasing our attention on important data analytics across the company starting at the top.
This enables not just more accountability but also faster learning.
It lets us see how people are using our products, what's working and what isn't.
And why.
And [adapt to what we can learn].
Now, let me turn to what this means for shareholders.
First, our strategy and our goals for 2023 that we shared about a year ago are not changing.
Our strategy and our goals for <unk> that we shared about a year ago, but not JV.
What is changing is the increased focus on execution designed to deliver the outcomes our customers and you all expect from us.
Second, we are investing to deliver growth given the massive market opportunity we see.
Second, we are investing to deliver growth given the massive market opportunity we see.
We've done a reallocation from many incremental investments for 2022.
There's also efficiency work underway that will pay off even more overtime.
The goal is to create optionality for the future.
To even improve margins or invest in high value opportunities.
Making Twitter an even larger and more profitable company for the long term.
I want to close by sharing.
I feel a strong urgency to improve our focus and execution.
But also a lot of confidence in our strategy and our team.
We have built a very important role in the world and decrease our responsibility to make it the best it can be very seriously.
With that, I will now hand it over to Ned.
Thanks, Parag and hello, everyone.
I'd like to cover our results our outlook at our buyback before turning to your questions.
On the results. Q4 closed out a record year for Twitter. Total revenue for the quarter grew 22% year over year to $1.57 billion and total revenue for the year grew 37% year over year to $5.08 billion.
[inaudible] grew 13% year over year to $217 million and US [NBA] users grew $1 billion sequentially, both in line with our expectations.
During the quarter, we continued to make progress across our portfolio of consumer revenue products.
We reiterated up spaces topics communities and our onboarding flow, all in service of growing our audience.
Performance ads grew faster than AD revenue in Q4, driven by Max our work here is paying off.
Over 2 million businesses identify themselves to us since the launch of professional accounts in Q3, giving us fertile ground to market add products to a growing base of accounts that are eager to reach their customers on Twitter.
On the outlook. Our strategy remains the same invest to drive growth and deliver on our goals of $315 million [in the EU] and $7.5 billion or more in total revenue for 2023.
In early January we closed the sale of Mopub generating proceeds of approximately $1 billion.
And enabling us to invest even more resources and performance as SMB and commerce.
And enabling us to invest even more resources and performance as SMB and commerce.
In 2022, we expect revenue to grow in the low to mid 20s range versus 2021, excluding MoPub and MoPub acquire with performance revenue growing faster than brands.
We expect total costs and expenses to grow in the mid 20% range in 2022 versus 2021, excluding 2020 was one time items with an upward bias, if we see the opportunity to drive faster growth in revenue or NDA.
Expenses in 2022 are expected to ramp in absolute dollars over the course of the year as we invest with headcount growth of approximately 20% and a focus on R&D.
We are pleased with the decisions, we've made to reallocate resources to make trade-off decisions to hold expense growth to these levels.
In 2022, we expect [MBAU] growth to accelerate in the US and international markets over the course of the year.
These expectations are informed by the data that we see which has been driven by our work to help people successfully create new accounts and reactivate existing accounts to get more value out of Twitter by finding what they're looking for faster our workers compounding to deliver results that we're seeing it in some of the important lead indicators.
In Q4, we saw more than 25% year over year increase in the number of people who come to Twitter every day to either create a new account or reactivate in existing accounts.
At a 35% year over year increase in daily sign ups.
Lastly, let me turn to our new share repurchase plan.
In Q4, we repurchased $266 million of stock via our share repurchase program that had been announced in 2020, bringing our total repurchase to $1.8 billion to date.
I'm excited to share that our board of directors has just authorized a new $4 billion share repurchase program, which is effective immediately and replaces the balance of approximately $819 million from our prior $2 billion authorization.
As part of the New program, we intend to enter into a $2 billion accelerated share repurchase program and plan to repurchase the remaining $2 billion over time. We'll continuously evaluate efficient alternatives to using cash on hand to fund the program, including accessing the capital markets subject to market conditions.
In summary, we're pleased with our results our strategy and our structure and we are working hard to deliver improved execution, which will lead to even better results in 2022 and beyond. Let's start with your question.
Thank you operator, we're ready for questions.
Thank you. Ladies and gentlemen, if you have a question at this time. Please press star then one on your touchtone telephone.
If your question has been answered or you wish to remove yourself from the queue, please press star then two.
Our first question comes from Doug Anmuth from JPMorgan. Please go ahead.
Thanks for taking my questions.
You mentioned the strong growth that you're seeing an important lead indicators with future MDA growth.
I'm just curious if you could talk about what that means for retention.
And how you can improve that going forward.
How you think about the drivers of [MBAU] growth acceleration through '22 and just beyond [inaudible].
Thank you.
Thanks for the question.
As we've shared, we have line of sight to hitting our goal of $315 million MBAU at the end of 2023. And some of this is informed by the early lead indicators. We've seen just to talk about sort of the growth funnel of MD of you as we see it.
It's important to think about the very top of the funnel where people show up to Twitter on a daily basis.
To either create a new account or the activating existing accounts after being away for 30 days.
By encouraging people who use Twitter on a logged out basis.
To login.
Sure.
We created a mechanism that they're able to achieve more daily utility.
In Q4, as a result of this work, we saw 25% year on year increase in the very top of the funnel.
Further, we've done work to remove friction for people as they sign up.
Through incorporating things like [sign in and sign off.]
As we've done this work.
This was part of what drove that 35% year on year increase in daily sign ins.
This was part of what drove that 35% year on year increase in daily sign ins.
As you think about all of the users.
That are coming into Twitter to find value.
As you think about the strategy we described around using the credit selection of content we have under our service.
And our ability to create increasingly personalized experiences to both investments in machine learning and also creating products that quality topics. What you see is us.
Creating beauty personalized relevant experiences for people so that they keep coming back to Twitter on a daily basis.
As you saw or you see all of this will sort of play forward a couple of years obviously.
[inaudible]
Thank you, Parag.
Thank you.
Thanks, Doug.
We're ready for the next question, please.
Our next question comes from Justin Post from Bank of America. Please go ahead.
Thank you, maybe one about the quarter and what about big picture revenues first person in the quarter. Can you just talk about how impressions were down and [CPE, Jeff] what you were doing within the AD stack to drive that? And then second maybe the spring yet.
It looks like guidance was maybe around 1 billion. I appreciate the full-year outlook of revenue growth this year, but you need one five next year to get to 7.5.
What are you thinking could help accelerate growth as we work through the next two years? Thank you.
Hey, Justin. Thanks for the question I'll jump in on both of them first on the AD metrics. So total AD engagements decreased 12% year over year and cost per engagement increased 39% and there are a variety of things that can cause it to move in one direction or another but in this case, we saw a mix shift to performance AD products, which.
As you know typically have a higher threshold to be an engagement at a grand add sometimes you just need to see it for it to be an engagement, whereas where there is a call to action to click through to something.
The threshold is higher and so sometimes you can show.
Great ads to people.
There'll be more performance-oriented, but AD engagements will go down and so that's what we saw that was the driver of it similarly cost per engagement increased 39% typically those lower funnel ads.
Have a higher cost per engagement because of that higher threshold, because it's closer to where the transaction happens which is why it's such an important part of our roadmap. So those two really the relationship between them.
It was important to think about this quarter in terms of the mix shift that drove each of them. On the second part of your question. So no changes to that $7.5 billion or more goal for next year and if you go back to perhaps comment on [DAU].
The acceleration that we expect to see over the course of this year in the US and international is core to the revenue opportunity because it gives us a larger audience to show better ads to number one and then two this roadmap that we've talked about where we've got a lot of hard work around our performance ads.
We've also delivered excellent growth and brand, which is that our strength historically is paying off and we expect to see performance ads grow faster the brand over the course of this year. Those two things together are what we think set us up to grow.
So in the low to mid 20s in terms of revenue growth. This year is to hit that seven $5 billion mortgage for next year.
Alright, thank you.
Thank you.
Thanks, Justin, next question, please.
The next question comes from Brian Nowak. Brian, please go ahead.
From Morgan Stanley. Thanks for taking the question. Thanks for taking my question.
To both of these advertising the first one, can you just talk to you in the Dr side, where do you think you've made to make progress building out the Dr products within a year? Where do you still see the key areas you need to achieve to directly to realize the '23 opportunity and the second one also on the advertising side as you think about your
2023 revenue guide.
Roughly what percentage of the advertising business do you expect the performance within that in your base case? Thanks.
Thanks for the question.
We've shared with you our long term goal around mix shifts between brand and DR is 50, 50 and that remains the same but it is a goal that we have over the long term.
As we sort of look at this year.
We see the VR business growing faster than brand business. So you'll see us make progress towards that goal this year and I expect that to continue going forward as we approach [inaudible] the long term.
In terms of sort of your question around sort of where we've seen more progress in what we see.
Look across this year.
Last year really.
As we shared, our strategy around performance was to initially focus on mobile App promotion, which is app install some happy engagement and I think we made progress there, but that business is growing well.
As we sort of look.
Where we are today, we are now increasing the investment we have to also be on web performance starting at the top with like new products, we shipped in the last few weeks.
With web traffics.
Which [inaudible] of the products we have.
And increasingly moving more down funnel in the web performance opportunity.
Also through the sale of mobile reallocated.
Those resources towards the efforts across the performance roadmap, but also into small business will go through Roadmaps, which will allow us to deliver more value to small businesses through the revamped quick remote product that you've now been testing and I have all of this come together it creates opportunities for us to get into commerce. So I think that's what you should expect in <unk>.
Of us, making progress on the performance road map.
Thanks, Brad.
Okay.
Thank you next question please.
The next question comes from Ross Sandler from Barclays. Please go ahead.
Just to follow up on that last answer the letter talks about.
Dr AD format.
It sounds like e-commerce , and the website troffer product.
There's going to be the needle mover in 'twenty to my hearing that correctly that that will kick in in a lot more of them.
Map, which has been kind of carrying the day and Dr. Thus far.
That is the big opportunity over the next two years.
A housekeeping question it.
It looks like Kraft install was doing about.
10 million per quarter, and low carb was the other come affordable changes is that right in terms of how much we should take out of our AD portion versus like moving portion.
Taking out those two businesses.
Sure.
Thanks Ross.
We have been exiting fast on cellular for performance product <unk>.
<unk> mobile App promotions, but also now more so on the debt.
On the performance side.
Traffic as we think about it is not something we consider to be a performance product in terms of how we account for brand versus Dr revenue that being said.
Allows us to get increasingly downed funnel so that we can deliver.
Outcomes in conversions to the customers who are starting to use this product and our strategy for this year include sort of improvement in our mobile app promotion again, increasing investments in more down sort of the efforts that go well beyond <unk>.
Installs and similarly on the web performance side to get more down funnel conversion leading into.
Small businesses and E Commerce solutions coming growth and on the second part of your question Ross on the mix. So we haven't broken out low pause versus both of acquired yield cross install business, but just to walk you back through what we've shared in the past.
It was about $188 million in 2020 revenue.
About $218 million of 2021 revenue.
50 going towards $60 million over the course of 2021 the details are in the letter.
And we said in the past the 2022 would have been between 202 hundred $50 million revenue and just to remind folks what we've talked about here in the past. We did this to reallocate our resources to higher priority work, where we think there's a better payoff overtime ads on Twitter.
And in doing that we've already reallocated the people.
But the revenue lags the work that the people do it. So we don't expect to make up all of that 200 to 250. This year, but we do expect to make up the effective run rate of low published both or acquire in 2023, which is why there are no changes to those long term goals that we've laid out.
Thank you next question please.
The next question comes from Rich Greenfield from <unk> partners. Please go ahead.
Hi, Thanks for taking the question.
Maybe just first off.
To understand.
Why you are the right choice for the board to CEO I think maybe helping people understand the key initiatives that you were behind what drove the board to make you CEO because I still think a lot of people probably listening to this call. They don't know a lot about you historically and so just from a historical context would be great and then just a follow up for <unk>.
On the MDA used.
I think theres a lot of investors that were sort of expecting you to reduce your 2023 guidance.
When you think about sort of that reacceleration to 20% growth.
Which is where you ended sort of where your Q1 wasn't where you were back in 2020, what's the single greatest reason why you have such confidence in 20% growth over the next two years.
Hey, rich thanks for the question, let me take the second question first and then I'll get to the first one.
As I said, we have line of sight to our 16 million MTA Nucor from vendors kind of debating what gives us this line of sight.
The.
In response to the first question the information I shared around the top of the funnel, how we're making changes to both customers at the very top of the funnel shown intent.
Create an account and login and also how we're reducing friction for more and more people too.
Creating an account and logging in.
Back.
The information that gives us the confidence alongside these automatically have ahead of us in terms of improving personalization and selection.
We're able to get to the $315 million <unk>.
Now.
We've shared these numbers with you in part so that you can understand why we believe in our ability to hit this and the impact of this income. This work should be broad based in the U S and internationally, which is why we've said that our expectation around.
We are seeing an acceleration in growth through the course of this year.
A quick question.
I have been out there for.
Decade now.
<unk>.
<unk>.
I've had the privilege of working on all kinds of initiatives.
Perfect My journey here working on the.
Add on building AG products.
Well before the IPO and I think as a result of that time I gained a lot of empathy for our advertising customers in lots of respect for advertising as a business that enables us.
Service like Twitter to be free for all of our customers all around the world.
Hi, subsequently spend time working on.
Consumer initiatives working on machine learning efforts.
Incrementally improve the home timeline delivers relevant in the home timeline.
<unk> allows us to sort of.
Stock growing MDA use.
And accelerate into the low double digits, and then sustain that over time.
I think in the most recent period with my time here has been the CTO.
I've been on the leadership team are involved in all strategic decisions, whether they be around technology, but also around <unk>.
<unk> policy, how we do resource allocation, how we reorganize ourselves and I think that's given me a lot of perspective around both for customers outside the company, but also the internal to the company and how to do.
Constant improvement.
Within the company so that we can deliver great products for our customers.
Thank you and we'll take the next question from Twitter.
Thanks Rich.
Take the next question from Twitter. This is from the account of TVN Euro acts and Damien asks would you touch on web three incorporation.
And also the amount of new Twitter blue subscribers.
Thanks, Jamie to answer your question Peter.
On <unk> I think it's very interesting what youre seeing I think it's important as we sort of look at the opportunity ahead of us to think about the secular trends all around us.
If you think about the broader digital ecosystem, which includes crypto currencies. The work segment <unk> project or even broader all of the decent life technologies and applications being built on top of the biggest blockchain.
Do you notice is this incredible amount of Devon energy.
The local energy, but just interested in solving problems.
And what that does it creates opportunities for a service like ours, which is operating at scale with a lot of customers.
Just happens to be the place where this entire ecosystem goes to find out what's happening across the ecosystem.
With connected to sort of how this secular trend is evolving over time.
Small internal inventory.
Looking at opportunities in there.
Arms of how we might partners this change towards benefiting creators on our service towards benefiting all consumers on Twitter and get excited about all the opportunities that periods.
On your second question around quicker Blue.
It has been.
Strong journey for us as we've sort of added more features to lubricate the more value overtime as we've expanded the number of markets. This product is available.
Now in Q4.
We're getting into.
Both U S and New Zealand in addition to the Canada and Australia markets that we started.
Earlier part of the year.
<unk> seen it.
People use the product what we've seen is sort of.
Most heavy users of the product is we have this as targets I mean, we've seen.
A strong response from them.
It's a very small part of our revenue to date is really excited about the future roadmap.
Critical to how we deliver to $7 $5 billion of revenue in 2023, but create massive opportunity for us is going to be on track.
Great. Thank you and we are ready for the next question. Please operator.
Thank you. So we have a question from Eric Sheridan from Goldman Sachs. Please go ahead.
Thanks for taking my question first congrats on the new role.
Maybe following up on Rich's question first when you look back over the last two to five years, what do you think Twitter might have done differently or what should we think in terms of your strategic vision for where you might want to do things differently.
Looking forward from where the strategy was in the last few years and then maybe on the investment and the margin cadence with the strong level of investments that you are calling out in 2022, how should investors think about whether we're in the middle of that use of an investment cycle versus the later innings of an investment cycle for Twitter against your goals to position for the long term. Thanks.
Thanks for the question Eric.
Then that critical and yes, as I mentioned and I've been on the leadership team over the last four years one of the things to keep constantly been focused on is how do we go faster how we can ship more product to.
To our customers.
In order to give them more value.
That's taken on this role my focus has been on improving our execution.
I bring.
A strong amount of urgency to this rule.
This is very focused on metrics and observing them and reacting to them.
Are you able to understand what's working for our customers whats not working for our customers and to use that understanding to Austin keyboard products.
I also.
Increased focus and accountability across the company.
Evidenced by the changes you've made around the GM structure.
The demand and.
And how we're driving more accountability at the leadership level, but also as a captive to go back to.
What you should expect from us.
Consequently, improving execution.
Our constant focus on delivering outcomes for our customers and put our shared with us.
And for you all to be hold me accountable for delivering these results.
Eric on the second part of your question I'll step back from a baseball analogy around divestments, but sure that we still feel like it's really early for US both in terms of the audience opportunity and that those lead indicators that we shared.
35% growth in sign ups.
Some of you are able to see in a quarter that demonstrates what's possible to us that we're just getting more at bats in terms of helping people find what they're looking for on Twitter.
Big part of that gives us the optimism that we're early there and then when you look on the other side is that $150 billion and growing market for digital ads outside of search outside of China as with a business that's 3% of that addressable market. We still feel like it's really early there too I would go back to parag the opening commentary I talked to.
About creating optionality by reallocating resources by selling more pumps by.
<unk> thoughtful about where we put our dollars to work in putting as much of a buyer a few areas as possible. That's all designed to make sure that we have choice over time, so that when we do see opportunities to invest against those two big addressable markets that we can do so while also creating the opportunity to deliver margin over time as well and with that in mind of course, there's no change to the margin.
Potential for the company that we've talked about in the past either.
Thanks, so much.
Thank you next question please.
The next question comes from Mark Mahaney from Evercore. Please go ahead.
I just wanted to ask about that 35% growth in sign ups in the quarter could you just provide some more context around that.
I would assume thats the fastest growth you've seen on that particular metric in quite some time and then do you have any read into.
Whatever the character of that those.
Those people that are signing up are the people who were on Twitter before and have come back people that are brand new to the platform any any color you have on how different that 35% is those people are then.
Current users. Thank you.
Thanks, Mark So a couple of thoughts there first is these are sign ups. So it could be somebody is creating a new account a research analyst once they go through the sign up flow, perhaps but typically we think these are people who are new to Twitter, where this is a new opportunity for us to show somebody what Twitter is all about that 25%.
Number that we shared which is sign ups plus reactivation is going to be a better way to look at people, who are giving us the second Janssen havent been on Twitter enough in the past or they've made it part of their daily habit. When we think about some of the things that are driving this single sign on has been a big driver. So when people don't have to remember or create a new password.
It's been a big help so 40% of the accounts that were created in Q4 were created using single sign on.
It's just a great example of reducing friction for our <unk> also talked about where we're encouraging people to log in when they keep coming back to Twitter because somebody sends then a tweak because they saw something on another platform that had come from Twitter.
We're encouraging them to log in because we believe we can sure that better tweaked them better ads if they do so these are <unk>.
Pounding in terms of sign ups and reactivation as we think about the character I Hope. These are all of outstanding character these folks, but when we.
Joking aside when we look at them. They look a lot like the people who have come to Twitter in the past, there's just more of them and although we haven't disclosed this number in the past it didn't feel like it was a big enough move from what we've seen in the past it was important to share when we think about what gives us confidence about the progress we can deliver over the course of this year.
Thank you Nick.
Thank you next question please.
We have a question from Deepak massive Shannon from Wolfe Research. Please go ahead.
Thanks. This is zach on for Deepak first another one on Dr.
Do you have the <unk>.
Sufficient targeting signals from both users and other sources.
Better in areas of commerce over a long term or is this an area that you plan to invest behind it in the next couple of years and then second.
Can you just provide any color on the brand spend trends in the fourth quarter was there any kind of verticals or categories to call out.
The soft softness either due to omicron, our supply chain and labor.
Any kind of trends youre seeing so far in the first quarter.
Thanks for the question I think the first part and let Mike take the second part in terms of Dr. I think that.
My opening comments I spoke about our strategy around personalization I spoke about how we are investing in machine learning capabilities that allow us to understand customer and Christopher.
Also building products, which allows people to tell us what they are interested in for example by following topics as you think about understanding for this customer and basic not only helps us improve our consumer product.
Also allows us to channel and use that under the timing of customer intent.
Into creating more relevant advertising and border elevated experiences, including getting down point of the performance advertising.
And the commerce so.
That's actually going to be a part of our strategy to be able to.
Really push performance when it comes to BR and be able to get into more commerce oriented businesses.
On the second part of your question Zach around Q4 trends in Q1, So Q4 I got off to a strong start with a big event calendar all around the year are all around the world and Covid impact being less if you think about the October November timeframe.
As the quarter went on we saw the company who want to shop around the holiday season ramp up quickly.
And.
And so there was there to out deliver for them when that happen as we think about where we came in from a revenue perspective relative to the range that we provided I guess I'd point out a couple of things. The first is FX impacted us by about a point and the second is that if we look at that strength that we saw at the beginning of the holiday season in the U S.
Didn't maintain the same pace in the last couple of weeks of the quarter to hit the high end of the guidance range, but we're pleased with where we came out and if we look at the first part of this quarter, which of course informs the guidance that we provided today for the quarter and the outlook that we shared for the year anecdotally it did feel like advertisers.
Got off to an earlier start than what we've seen in the recent past, whether it's in planning and thinking about where and how they want to show up around product launches of big events happening all around the world from the Olympics to the Super Bowl to award shows and other things and also in executing on those campaigns early in the quarter.
Which sometimes hasnt been the case for one reason or another so we feel like we're off to a good start.
Thank you.
Thank you. Thank you. The next question please.
We have a question from Dan Salmon from BMO capital markets. Please go ahead.
Good morning, everyone.
Thank you for taking my question I've got a few more banks your new ad products.
First just maybe to jump back he'd mentioned all of the new ones announced in January will maybe come back and get a little bit more feedback on those later, but.
Earlier in the year, you watch Carousel ads Cotai V would just love to hear any feedback from that.
And then second you mentioned SMB being sort of the important next frontier for AD product development I think that was one of the themes there.
Perhaps could you just spend a little bit more time on quick promote products as well as professional accounts and in particular, what they solve and how you see them working together mark that would be great. Thank you.
Thanks for the question.
Really excited about the SMB opportunity ahead of us we need to be launched.
Product.
And just.
Sort of able to make it easy for people to use this product.
To drive revenue.
Revenue from that land separately can you talk about sort of how we're different professionals.
Or sort of these professional accounts with <unk>.
Shift sort of connected with that strategy.
They've had a lot of businesses on Twitter with commercial intent.
And then I do value organically, except that we've never identified them to be able to tailor amazing experiences for them to drive that need to be extra months as you've sort of started shipping these projects, which provide them value for creating and driving value in the organic experiences. We are also now able to channel.
<unk> funnel them able to sort of.
Product oriented businesses, including our advertising products. So if you think about sort of that strategy coming together with performance oriented advertising strategy inclusive of mobile app promotions.
Getting into web performance and if you see sort of how that alongside a product offering for quick promote comes together we have this incredible top of funnel for these products coming from our professional accounts.
Oriented experiences that we're creating.
And then just any color on the JV carousel ads traction.
Sure Dan it's early for those products, which we talked about last year Twitter.
<unk>.
Yes.
The carousel product and some of the other format that you described I think if you just step back from any one of them individually and you thought about them collectively.
We're clearly moving faster and rolling out products to help advertisers of all sizes.
Clearly working hard to adapt to the ever evolving ads ecosystem of changes whether they are from regulators or operating system makers.
Or from advertisers and how they want to show up and so the ones. You mentioned are just great examples, but youre going to see a playable AD format youre going to see us.
To make improvements to the website traffic AD format, which we just rolled out.
Earlier in January .
And some other things over the course of this year that we're excited about so I hope you'll continue to see more new products from us over the course of this year.
Okay. Thank you Bob.
Okay.
Okay.
Thank you and I think we have time for just one last question.
Operator, if you could please.
That person on the line. Thank you.
So we have a question from Lloyd Walmsley from UBS. Please go ahead.
Yes, Thanks for squeezing me in.
Two if I can first just following up on Mark's question on MDA. You can you just unpack the funnel a little bit more I mean, clearly it sounds positive youre seeing more top of funnel traffic and it sounds like conversion of sign ups is higher but how does that then that.
Maybe that cohort behavior change due to the new sign ups generally see usage peak when they sign up and then fall does it build over time like how should that flow into reported MDA use.
And then I guess the second one on Opex.
Ned last quarter I think you said, even if you didnt add head count just annualized last year's head count would grow into kind of mid twenties.
And you said your plan this year is to grow 20%, but youre still kind of in that mid mid 20% cost growth range, So where the comments last quarter, just conservative or are there new areas of efficiency and I guess at a high level.
How do you get margins to your long term targets.
From from these levels given the level of investment you guys are making.
Well I'll take the first part on <unk>, and then turn to product.
On the audience numbers. So this is a level of disclosure that we havent provided in the past when we started because we thought it was an important lead indicator as we enter a big year for us in terms of MTA your growth relative to those goals.
You.
Look at the makeup of the people who are creating accounts.
The people, who are coming back to Twitter to give us another shot.
Look a lot like the other couple of hundred million people, who have been using Twitter every day and rather than break down the funnel and think about where we are we've got the most opportunity there are opportunities for us throughout the funnel.
To continue to do better to show people, what Twitter is all about we've made a lot of progress and reducing friction at sign up and in the onboarding flow asking people for.
Specific interest so we could recommend accounts with opex to them. We now have over 280 million accounts that follow a topic.
But we also are getting better and better at showing people notifications that are relevant to them to bring them back to Twitter and encouraging them to log in when they havent been logged in but it's been benefiting from Twitter. So we can show that better and better at all this stuff is paying off and so I wouldn't want you to focus too much on one area or another around the funnel because we see.
Throughout.
Let me take the margin question.
This said our thinking around long term margins has not changed.
But this year, we've not optimizing for margin expansion right now we want a mixture of that investing appropriately for growth given the massive market opportunity we see.
But you want to do so efficiently.
We've shown how we are reallocating resources by having sold move up into sort of higher value opportunities around performance.
And small businesses. We've also been looking for other efficiencies across the business, including part of our infrastructure.
As we sort of mix, we do the work to drive optimization.
Some of it paid off this year, but even more so in the coming years.
As we look for these efficiencies and done the work we've been able to make incremental investments that we wanted to make for this year in 2022.
By staying within the same range that we told you three months ago in terms of how that growth and I think thats evidenced by around sort of how we are trying to be more efficient and all of this work is in pursuit of increased optionality in the future, but we can use this optionality.
Delivering margin expansion.
Or we can identify other high value growth opportunities progressing.
I now hand, the call very much.
Please go ahead Katy.
Thank you and I'll now hand, the call back to the management team for any closing remarks.
Alright. Thank you. We appreciate your interest in Twitter, we look forward to speaking with you next quarter. When we report our Q1 earnings on April 28 before the market opened until then we will see you on plate.
Ladies and.
Gentlemen, thank you for participating in today's program. This concludes the program you may all disconnect have a good day everyone.
Okay.
Okay.
Okay.