Get the most important digital marketing news each day.
Twitter Soundly Beats Expectations With $502 Million In Q2 Revenue
Company reports 304 million in monthly active users, 316 million including users who sign in only via SMS.
Twitter solidly beat Wall Street estimates today, reporting $502 million in second-quarter revenue. Analysts had expected the company to bring in $481 million in the quarter.
The reported revenue is a 61 percent increase since last year at this time and 15.1 percent over the company’s disappointing first-quarter results. Earnings per share were 7 cents, excluding certain expenses, a total that beat estimates of 4 cents.
Twitter stock, which closed the trading day up 5.25 percent at $36.56 a share, was continuing its upward trend in early after-hours trading, up about 5 percent.
Advertising revenue was $452 million, a 63 percent year-over-year increase, with 88 percent of that revenue coming from mobile ads.
Twitter’s user growth, long a problem area for investors, continued to lag. The company reported 304 million monthly active users (MAUs), up only 2 million since the first quarter. However, Twitter has changed how it defines MAUs and is now including users who only sign in via SMS, typically people in the developing world with low bandwidth mobile devices. Including so-called “SMS Fast Followers,” Twitter now has 316 million MAUs.
“Our Q2 results show good progress in monetization, but we are not satisfied with our growth in audience,” Twitter’s interim CEO Jack Dorsey said in a release. “In order to realize Twitter’s full potential, we must improve in three key areas: ensure more disciplined execution, simplify our service to deliver Twitter’s value faster, and better communicate that value.”
Twitter has been struggling to find its footing after subpar financial results last quarter drove its stock down 25 percent in two days. The company has released or telegraphed a number of new products that it hopes will entice more people to become regular users. And there are some indications that the company’s efforts are paying off.
However, Twitter executive ranks are in flux. Two executives, including Christian Oestlien, the VP in charge of growth, announced that they are leaving the company this afternoon. And the company is still searching for a permanent CEO after Dick Costolo resigned in June. Interim CEO Dorsey, who may or may not be a candidate for the permanent job, will take questions from analysts in a conference call at 5:00 p.m. Eastern. You can listen in here or view the proceedings on Twitter’s live streaming app, Periscope.
— Jack (@jack) July 28, 2015
[Postscript: Twitter lost all its stock market gains in later after-hours trading, as investors apparently reacted after hearing CFO Anthony Noto signal that it’s going to take a “considerable” amount of time to turn around the slow trends in user growth. The stock was down about 9 percent at 6:15 p.m. ET.]
Some opinions expressed in this article may be those of a guest author and not necessarily Marketing Land. Staff authors are listed here.