Big Tech Earnings: FB, TWTR, MSFT

Here we dive into the digital health of three major tech stocks: Facebook (FB), Twitter (TWTR), and Microsoft (MSFT). What do the online trends reveal about these mega-caps? Using our powerful web traffic alternative data, we reveal the key digital insights heading into the print.

Big tech stock #1: Facebook, Inc.

Q3 2021 Earnings date: October 25 after market close

It’s no secret that Facebook hasn’t had the easiest time recently. Earlier this month, FB was hit with an outage across its platforms that lasted around six hours.

And only a few days later, former Facebook employee Frances Haugen claimed in congressional testimony that the company puts ‘astronomical profits before people.’ Shares dropped accordingly.

However, earnings could give Facebook a chance to improve investor sentiment. Analysts are predicting strong 37% sales growth for the quarter with earnings up 17% (32% pro forma), according to S&P Global Market Intelligence, as a recovering economy boosts ad sales.

Note that Facebook already crushed second quarter 2021 earnings estimates. The impressive print was largely due to the climbing price of ads and volume – with a 47% year-over-year (YoY) increase in the average price per ad and a 6% increase in the number of ads delivered. So does the social media giant have what it takes to put on a repeat performance?

Looking forward, FB says it expects that ad revenue growth will be driven primarily by price increases during the rest of 2021. At the same time, it has to contend with a very tough comparison to 2020, and this is reflected in the company’s guidance.

For “the third and fourth quarters of 2021, we expect YoY total revenue growth rates to decelerate significantly on a sequential basis as we lap periods of increasingly strong growth” the social media giant told investors last quarter.

Spike to ad domain

In 3Q21, our data shows that monthly unique visitors (MUVs) to the subdomain business.facebook.com, which can be used as an indicator of advertiser demand trends, improved from the previous quarter. In 2Q21, total unique visitors to business.facebook.com hit 65.9 million, rising 19% to 78.6 million for the third quarter.

However, we can see that there was a slight pullback in traffic in September vs. July and August. And the impact of the outage and the company’s name change on Q4 ad demand remains to be seen.

Pro Tip: Monthly unique visitors are an indicator of monthly active users (MAUs) – a critical digital metric used to indicate the popularity, performance, and growth of a website.

If we focus on Facebook users to the main website facebook.com, the trends are less bullish. Global traffic to facebook.com in 3Q21 fell 18% YoY with a 0.64% drop from the previous quarter. For comparison, in 2Q21 traffic came in at -17% YoY. Notably, the U.S. trend is slightly better than the global trends. U.S. traffic was down 16% YoY, and stable with the second quarter.

Facebook audience engagement trends

For Facebook, audience engagement is a closely-watched metric, especially given its potential impact on advertiser interest. A key signal for audience engagement is visit duration – as you would expect, the more engaged a visitor, the longer the time spent on the platform.

Our data shows that Q3 global visit duration pulled back 4.4% YoY (and was flat quarter-over-quarter) as people spend less time on the Facebook website. The average number of pages per visit also stayed stable quarter-over-quarter.

Big tech stock #2: Twitter

Q3 2021 Earnings date: October 26 after market close

#Twitter is trending right now. Investors are excited about a slew of upcoming initiatives. These include support for crypto tipping, NFT authentication, and a brand-new ‘creator fund.’

“The goal of it really is to provide that technical and marketing expertise,” explained Twitter’s product lead for creator monetization Esther Crawford. “We think of it as kind of a stopgap solution. We want to onboard these folks into other long-term monetization features. But we want to give them an initial boost,” she said.

At the same time, our data shows that visits to Twitter’s global ad portal (ads.twitter.com) improved from the second quarter to the third quarter by 4%.

However, on a YoY basis, growth slowed from 48% in 1Q21, and 30% in 2Q21, to just 16% in 3Q21.

Note that ad portal visits – lagged by one quarter – have historically shown a strong correlation with ad revenue, a key earnings metric for the social media giant.

This means that Twitter’s ad revenue this quarter should reflect the 30% YoY growth to ads.twitter.com seen in 2Q21. And the implications of this quarter should be seen in Twitter’s guidance.

Turning to twitter.com, we see a notable slowdown in visitor growth. For 2Q21, global visits came in +10% YoY, pulling back from the 16% YoY growth achieved in 2Q21 (and 30% in 1Q21). However, in number terms, there was a 3.5% traffic increase QoQ from 19.56 billion to 20.24 billion.

U.S. visits demonstrated a similar – but sharper – trend, dropping from +11% YoY in 2Q21 to -2% in 3Q21. That’s down from 34% in 1Q21. If we look at the actual numbers of visits between the two most recent quarters (rather than YoY growth) the increase is just 0.7%.

Twitter audience engagement trends

For 3Q21, YoY global average visit duration came in at 10 minutes 40 seconds, a slight drop from the 10 minutes 42 seconds achieved in the second quarter. Bear in mind that in January 2021, Twitter enjoyed an average visit duration of over 11 minutes at 11:05 – one of its best months to date.

Nonetheless, we should note that this is still a clear advance in visit duration compared to pre-pandemic (with an average visit duration of 10:04 in 3Q19). You can see this in the screenshot below.

Also, check out the opposing visit duration trends for twitter.com and facebook.com over the last couple of years:

Pro Tip: Average visit duration is the average amount of time visitors spend on a website within a session. For most websites, the longer the duration, the better. Use this metric to understand how likely users are to complete the website goal (page views, purchase, etc.), analyze traffic month over month, and understand fluctuations and trends.

Big Tech stock #3: Microsoft Corporation

Q1 2022 Earnings date: October 26 after market close

In 2020, Microsoft Teams saw incredible growth spurred on by COVID-19, leaving Slack’s visitor numbers far behind. Its integration with the rest of the Microsoft enterprise suite gave it a unique advantage compared to standalone services like Slack (WORK) or even Zoom (ZM).

Our data indicate that since July there has been a clear surge in the number of unique visitors to teams.microsoft.com. This is the subdomain that leads to the login page for Microsoft Teams.

From March 2021 to July 2021, unique visitors fell by 22%. However, from July to September we saw an increase of 22% (up 7% YoY in September). And at the same time, we can see that the unique visitor numbers remain significantly higher than pre-pandemic levels (+721% from January 2020 to September 2021).

Spotlight on Microsoft Azure

Last but not least, let’s see how Microsoft’s cloud computing service Microsoft Azure is performing. Revenue for the service spiked 51% during the previous quarter – and helped drive Microsoft’s stunning earnings beat.

“The cloud growth party is just getting started in our opinion led by MSFT,” cheered Wedbush analyst Daniel Ives. The analyst has just highlighted Microsoft as his “favorite large cap cloud play,”while upping his MSFT price target from $350 to $375.

According to Similarweb data, total visits to azure.microsoft.com dropped 4.88% from the previous quarter. But despite the tough comparison to last year, visits are still +5% on a YoY basis.

Indeed, as you can see from the screenshot below, visits remain on a positive trajectory despite the slight pullback from the previous quarter.

Track Microsoft Corp’s latest digital market share here

Similarweb tracks data in near real-time with Investor Intelligence. The result: You don’t have to wait for earnings season to see how a company is performing online.

Find out which tech stocks are out-performing the market right now.

by Harriet Lefton

Investor Insights Manager

Harriet, a Cambridge graduate and qualified U.K. lawyer, transitioned from metal market journalism to financial blogging, using digital data for investment insights.