After a disappointing Q1 Twitter delivered a very strong second quarter. One might even call it a home run. Certainly it surprised analysts and investors who had been more modest in their projections.
Twitter’s Q2 revenues were $312 million, which was substantially above financial analysts’ consensus estimates. In addition, earnings beat estimates by a penny. Its user numbers also were greater than expected.
Both overall and mobile users were up, 24 and 29 percent respectively. Mobile was the source of 81 percent of the company’s $277 million in ad revenues (or $224 million).
Here are the important numbers:
Total revenue: $312 million, up 124 percent year-over-year
Ad revenue $277 million, up 129 percent
Data, licensing revenue was $35 million, up 90 percent
Mobile delivered 81 percent of total ad revenue
International revenue was $102 million or 33 percent of total revenue
Monthly active users 271 million, up 24 percent
Mobile active users were 211 million, up 29 percent
Timeline views were 173 billion, up 15 percent
The company had been dogged by skepticism recently about whether it could grow users and engagement. Yet all metrics appear positive (and some way up) across the board.
The stock is up more than 30 percent right now in after-hours trading.
We’ll be listening in on the conference call and report anything interesting. So check back.
Earnings call:
CEO Dick Costolo’s remarks:
We are the “world’s real-time information network”
Ad revenue growth came primarily from higher engagement
Highest number of net new user additions in five quarters
World Cup was a model of how Twitter wants to do events coverage. Showed how Twitter can grow/proposer by organizing content around topics and live events
6.5 billion impressions on and off Twitter during the World Cup final
There are “hundreds of millions” of additional unique users who come to Twitter monthly but don’t log in
Size of Twitter’s total audience is 2X – 3X its active user base. Trying to improve product and overall experience for these not-logged-in uniques.
Incoming CFO Anthony Noto: full-year guidance would be between $1.31 billion and $1.33 billion. This represents an increase over previous guidance based on Q2 and other developments the company is seeing.
Q&A:
Costolo says that Twitter is going to “build the largest audience in the world.” He said there will be more experiments and efforts directed toward the non-member audience. However Twitter remains committed to delivering the best user experience to members.
Noto: Other companies disrupt existing businesses. Twitter makes existing companies and brands better than they would otherwise be.
Noto: 16 million new net users in the quarter
There were several questions about cards, buy buttons and commerce on Twitter. Costolo and Noto didn’t offer much substantive discussion however.
Noto: Twitter “ad loads” are significantly lower vs. industry peers; there’s a big upside in terms of ad coverage.
Costolo: we have three audiences — logged-in users, syndicated audiences/users and “hundreds of millions” of users who come to the site but aren’t registered users. Costolo reiterated the big opportunity in doing a better job engaging the third group.
Costolo argues the Twitter user experience can be “a lot better.” Improved user experiences will add to Twitter’s metrics and bottom line.
Current Twitter self-service ads “primarily” being used by small businesses. Twitter hopes that enterprises increasingly use them over time.
Noto: smartphone penetration in developing markets will increase content creation and consumption on Twitter in those markets.
Noto: Better targeting and more ad formats will deliver higher CTRs over time. We will reach or exceed ROI/engagement metrics relative to our industry peers.
Noto: Twitter expects 35 to 40 percent log term EBITDA margins
Question re duplicative accounts in the MAU number. There are some users that have multiple accounts but Twitter declined to disclose what percentage were duplicative.
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