On Friday, Twitter Inc. posted stronger-than-expected Q2 revenue. It also reported an uptick in daily site-users who see advertisements internally, lifted by changes implemented by the social network involving relevant dashboard content.
Shares of Twitter surged nearly 5%.
Despite this, the social media giant predicts Q3 revenue lower than many Wall Street experts’ estimates. It added that revenue growth would delay during the first two quarters, partly due to changes in ad formats.
Twitter’s revenue and user-base have been in focus since the social media platform began deleting millions of spam, fake, and inactive accounts; most of which promotes hate speech or misinforms the public concerning political matter. This contributed to the monthly user-base decline through 2018.
Chief Executive Office Jack Dorsey disclosed that the social media platform saw an 18% drop in suspicious behaviors.
In Q1, Twitter reported a monthly rise in active users, which fueled allegations that Twitter was back on track to gains. However, it has since stopped revealing its monthly active users (MAU) count.
This quarter, the company reported monetizable daily active usage (mDAU), a metric created to track only the users who are exposed to advertisements on the site on a daily basis. This metric excludes those who access the platform via authorized site aggregates such as TweetDeck.
Twitter’s mDAU hit 139 million, overpowering analysts’ expectation of 135 million, according to Refinitiv’s IBES data.
“The strong growth in monetizable daily active users shows that Twitter users are sticking with the platform, and that should resonate with advertisers,” Jasmine Enberg, an eMarketer senior analyst, said.
Platform Changes and Earnings Report
Reportedly, Twitter’s Q2 profit amounted to $1.1 billion, or $1.43 per share. Last year, it reported $100 million in profit, or 13 cents per share.
Revenue was bolstered by an income tax benefit of over $1 billion, relative to its corporate revamp.
According to Refinitive, Twitter’s revenue soared 18% this year to $841 million, compared to Wall Street expectations of $829 million.
Total advertising was higher to $727 million, an increase of 21% year-on-year, as Twitter continued to improve its ad formats. Total ad engagements trod higher by 20% year-over-year.
The company forecast total revenue for Q3 to be within the $815 million to $875 million range. Analysts, on average, were anticipating about $869.3 million.
Twitter managed to strengthen its live and on-demand video content partnerships.
On Thursday, NBCUniversal announced that they would team up to livestream major highlights of the 2022 Olympic Games. This is Twitter’s latest move in a run up of deals directed towards boosting sports conversation on its platform.
The social media giant also broadened its multimedia features. Twitter launched a Snapchat-style camera feature on the mobile app and released its very own video clipping and publishing tool.
A week ago, the company released a redesigned version of the site. In March, it launched “twttr,” a beta app where a number of users can test out new features and services in attempts to ease the discovery and following of conversations.
Twitter’s total operating expenses, including revenue costs, increased by 21% to $766 million. The rise was partly due to the social media giant’s plan to hire more employees.
Twitter reiterated that operating expenses would increase by about 20% in 2019.
