With a shakeup in leadership, and numerous quarters with less than stellar user growth, many were not expecting much out of Twitter’s latest quartely earnings. In fact, more than a few seemed to be bracing for the worst. 

How wrong they were. Shares of Twitter soared in after hours trading, raising over 6% following the release of the company’s second-quarter earnings report. They are now up 2.5%.

The stock had risen 5.3%, or $1.84, to $36.54 a share during regular trading on Tuesday.

The optimism comes from Twitter reporting Q2 revenue of $502 million, up 61% year-over-year, and above the previously forecast range of $470 million to $485 million. It was also much higher than the $481.28 million that Wall Street had been expecting,

It also reported non-GAAP EPS of $0.07, beating the $0.04 expected by analysts.

Investors are also happy that, in slightly surprising turn of events, Twitter actually managed to do triumph in the area that it had been struggling with the most in recent quarters: user growth.

Average Monthly Active Users (MAUs) were 316 million for the second quarter, up 15% year-over-year, and compared to 308 million in the previous quarter. That beat the 310 million that analysts had been expecting. 

The larger-than-expected increase comes from the company’s new practice of counting so-called SMS Fast Followers, which are users who people who sign up and access Twitter only through text message. Without those users, MAUs were 304 million for the second quarter, up 12% year-over-year, and compared to 302 million in the previous quarter.

Mobile represented approximately 80% of total MAUs.

“Our Q2 results show good progress in monetization, but we are not satisfied with our growth in audience,” Jack Dorsey, interim CEO of Twitter, said in a statement. “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.”

Once again, almost all of Twitter’s revenue came from advertising, which accounted for $452 million, an increase of 63% year-over-year. It would have been 71% if not for foreign exchange rates. Mobile advertising revenue was 89% of total advertising revenue. Mobile advertising revenue was 88% of total advertising revenue.

Data licensing and other revenue totaled $50 million, an increase of 44% year-over-year. Of Twitter’s total revenue, $181 million was international, an increase of 78% year-over-year.

Twitter now is projecting revenue of between $545 and $560 million, with adjusted EBITDA in the range of $110 million to $115 million, for the next quarter.

For the full year 2015, it expects to see revenue between $2.2 billion to $2.27 billion, up from the $2.170 billion to $2.270 billion it was projecting last quarter.

It expects to see an adjusted EBITDA in the range of $520 million to $540 million, up from $510 million to $535 million.

(Image source: marketingland.com)

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