Revenue jumps at Twitter, but growth remains a concern
07/29/2014 6:38 PM
07/29/2014 6:38 PM
Twitter reported a jolt of growth in the second quarter, driven in part by heavy use of the service during the World Cup soccer tournament.
The strong results surprised Wall Street and prompted investors to send the company’s shares up 30 percent in after-hours trading Tuesday.
Revenue soared 124 percent, and the average number of people using the microblogging service in June was up 6 percent from March.
However, Twitter faced continuing problems getting people to return to the service, with the average user refreshing a Twitter feed 792 times a month on average during the quarter, less than the first quarter and last year’s second quarter. Globally, usage was down 7 percent from a year ago, but up from the first quarter.
Still, Twitter has demonstrated an ability to extract more advertising revenue from each user, and it is adding products that also allow it to sell ads in other companies’ mobile applications.
For the quarter that ended June 30, the company reported revenue of $312 million, up from $139 million a year ago. Analysts had expected the company to post revenue of $283 million.
Twitter reported a net loss of $145 million, or 24 cents a share, compared with a loss of $42 million, or 32 cents a share, a year ago.
Excluding certain stock-based compensation and acquisition costs, the company had a profit of $15 million, or 2 cents a share, compared with a net loss of $16 million, or 12 cents a share, a year ago. On that adjusted basis, analysts had expected the company to report a loss of 1 cent a share.
“Our strong financial and operating results for the second quarter show the continued momentum of our business,” Dick Costolo, Twitter’s chief executive, said in a statement. “We remain focused on driving increased user growth and engagement, and by developing new product experiences, like the one we built around the World Cup, we believe we can extend Twitter’s appeal to an even broader audience.”
Twitter said its users made 672 million tweets during the monthlong World Cup — more than any other event in its history.
Since it first sold stock to the public in November, Twitter has been struggling to find ways to make its service more compelling. The average number of users in a given month, a key figure used by Wall Street to measure all social networks, has grown by single-digit percentages from quarter to quarter since its initial public offering.
In June, Twitter said, it had 271 million monthly average users, up from 255 million in March.
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