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Twitter Reports Highest-Ever Yearly Growth of Daily Users

Twitter reported its highest-ever yearly growth of daily users who can view ads, beating analysts’ estimates on usage and sending its shares up 6 per cent in pre-market trading on Thursday.

The company missed Wall Street’s lowered expectations for quarterly revenue despite the surge in usage, as the coronavirus-spurred economic slowdown battered the company’s largely events-oriented digital ads business.

Ad sales, which make up 82 per cent of Twitter’s revenue, sank 23 per cent to $562 million (roughly Rs. 4,205 crores), a drop the company attributed to brand spending pauses tied to the pandemic and US civil unrest. Analysts had expected $585 million (roughly Rs. 4,377 crores), according to IBES data from Refinitiv.

But even as current events prompted advertisers to pull back, people continued to flock to Twitter to discuss them. Twitter’s average monetisable daily active users (mDAU) increased 34 per cent year over year to 186 million, above analysts’ target of 176 million.

Twitter has struggled to build out its ad offerings, leaving it reliant on a suite of promotional tools geared toward advertising around big events and product launches, which have all but vanished during the pandemic.

The company said it finished rebuilding its ad management technology in the second quarter, which would support faster development of new formats going forward and was rolling out measurement tools for “direct response” ads used by app developers.

Total revenue came in at $683 million (roughly Rs. 5,110 crores), down 19 per cent year-over-year, helped by steadier sales growth from the licensing of users’ posts to researchers and marketers.

Twitter reported a second-quarter loss of $1.2 billion (roughly Rs. 8,979 crores), largely driven by the reversal of a tax benefit established last year when the company transferred the intellectual property to Ireland. Because of the second quarter’s steep coronavirus-related losses, Twitter did not make enough money to take advantage of the tax benefit.

Adjusted to exclude the tax considerations, the company incurred a loss of $127 million (roughly Rs. 950 crores), or 16 cents per share, roughly in line with analyst expectations of a $125 million (roughly Rs. 935 crores) loss. It had an adjusted profit last year of $37 million (roughly Rs. 276 crores).

Echoing earlier guidance, Twitter said it expects data licensing revenue to “moderate” for the rest of the year.

It also said it was exploring “subscriptions and other approaches to compliment our advertising business,” although it was not expecting any revenue to result in this year.

Costs and expenses grew 5 per cent to $807 million (roughly Rs. 6,037 crores), below the increase in the low teens that Twitter had forecast. The company said it anticipated expense growth of 10 per cent or more in the third quarter.

Social media rival Snap missed user growth estimates earlier this week, as its usage bump from coronavirus lockdowns petered out sooner than expected, but it beat targets for revenue gains.

SOURCE: https://gadgets.ndtv.com/

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