Shares of Twitter Inc (NASDAQ: TWTR) surged in premarket trade on Friday, after the social media company reported second-quarter daily active user numbers and revenue that smashed market expectations.
Twitter’s revenue grew 18% year-on-year, while monetizable daily active users (mDAUs) increased 14% to a record 139 million. In the U.S., average domestic mDAUs rose 10% from the second quarter of 2018 to 29 million.
International average mDAUs climbed 15% to 110 million in the quarter. As of 7:28 a.m. ET, Twitter shares were up 6.51% to trade at $40.60 apiece.
TWTR Earnings & Outlook
Twitter had net income of $1.12 billion, or $1.43 per share, compared with $100 million, or $0.13 per share, in the prior-year period. The company attributed the gain to an income tax benefit of $1 billion related to the establishment of a deferred tax asset for corporate structuring.
Excluding the tax benefit, earnings came to $0.05 per share, compared with the same period a year ago when the company posted adjusted earnings of $0.08 per share. On average, analysts polled by Refinitiv were looking for adjusted earnings of $0.19 per share in Q2 2019.
Revenue came in at $841 million, an 18% jump from $711 million in the second quarter of the previous year. Analysts expected the company to generate revenue of $829.1 million in the June quarter, according to Refinitiv.
Twitter said advertising revenue rose 21% from a year ago to $727 million in the latest quarter. For the current quarter, the company forecasts revenue of between $815 million to $875 million and operating income of between $45 million to $80 million.
Twitter CEO Comments
“Health remains our top priority and we are proud of the work we did in Q2. Our focus was on ensuring that our rules, and how we enforce them, are easy to understand. We also continued our work to proactively identify and address malicious behavior, resulting in an 18% drop in reports of spammy or suspicious behavior across all Tweet detail pages, which show the replies to any given Tweet on our service,” said Twitter chief executive Jack Dorsey in a press release.
“In addition, we continued to leverage machine learning to deliver more relevant content, driving increased usage of Twitter on a daily basis, with mDAU up 14% year-over-year,” Dorsey added.
Twitter Inc Profile
Twitter is an open distribution platform for and a conversational platform around short-form text (a maximum of 140 characters), image, and video content. Its users can create different social networks based on their interests, thereby creating an interest graph.
Many prominent celebrities and public figures have Twitter accounts. Twitter generates revenue from advertising (90%) and licensing the user data that it compiles (10%). – Warrior Trading News