Twitter Inc. shares rose sharply in late trading Thursday, after the company reported that it added 7 million users in three months, helping revenue jump 74%.

Executives for the San Francisco-based company said in a letter to investors Thursday that Twitter experienced “better-than-expected performance across all major products and geographies” in the second quarter. Revenue rose to $1.19 billion from $683.4 million in the year-ago quarter, with ad revenue soaring to $1.05 billion, an increase of 87% year over year.

“Twitter is riding the broader digital wave spurred by the pandemic,” Forrester analyst Jessica Liu told MarketWatch. “Consumers have increased their time spent on social media, gaming, online shopping, streaming TV, etc.”

Twitter
TWTR,
+0.04%

shares climbed 5.7% higher in the extended session, after ending the regular session at $69.59, an increase of less than 1%. 

The social-media service reported net income of $65.6 million, or 8 cents a share, compared with a loss of $1.38 billion, or $1.75 a share, in the year-ago period that saw COVID 19-related adjustments. After adjusting for stock-based compensation and other costs, Twitter reported second-quarter earnings of 20 cents a share.

Analysts surveyed by FactSet had forecast adjusted earnings of 7 cents a share on revenue of $1.06 billion, including ad revenue of $926 million.

On the Thursday afternoon earnings call, Twitter’s top executives said they were pleased with the company’s performance and momentum and plan to boost investments and hire more workers as a result.

“A growing audience, better ad products, strong sales execution, global events and advertiser product launches all had a big impact on our performance,” said Ned Segal, Twitter’s chief financial officer.

Despite overall user growth, Twitter saw a decline in its home country, where U.S. daily active users fell to 37 million from 38 million the previous quarter.

Asked about U.S. user numbers, Chief Executive Jack Dorsey said the company plans to “make sure that when people come in for one reason, however small that is, that they’re seeing a much broader universe that’s a lot more relevant to them than it was in the past.”

Twitter expects third-quarter GAAP operating income to be between a loss of $50 million and break even on revenue of $1.22 billion to $1.3 billion. Analysts on average had expected revenue of $1.17 billion, according to FactSet.

The report portends well for other ad-based social-media companies, as does another report that landed after the market closed Thursday, from Snap Inc.
SNAP,
-0.66%
,
which also reported strong growth. Shares of the company’s much bigger competitors, Facebook Inc.
FB,
+1.43%

and Google parent Alphabet Inc.
GOOGL,
+0.68%

GOOG,
+0.55%
,
also rose after-hours, with Facebook increasing nearly 3% and Alphabet gaining nearly 1% ahead of their earnings reports next week.

Twitter stock has risen nearly 29% year to date and is up about 81% in the past year. By comparison, the S&P 500 index
SPX,
+0.20%

has climbed 16% so far this year, and 35% in the past 52 weeks.

What's your reaction?

Excited
0
Happy
0
In Love
0
Not Sure
0
Silly
0

You may also like

Leave a reply

Your email address will not be published. Required fields are marked *

More in:Latest News