Twitter (NYSE: TWTR) Reports 34% Jump in Monetizable Users, Revenue Recovery Inbound

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Twitter NYSE:TWTR reported its second-quarter earnings today, sharing with investors that it had hit record levels of traffic but at the same time seeing double-digit declines in revenue. 

Twitter reported revenue of $683 million, which amounted to a loss per share of $0.01. Analysts forecasted $700 million in revenue, while Twitter expected a 27% higher figure. The company said advertising revenue was $562 million, down 23% year over year. Advertising revenue was down just 15% year over year in the last three weeks of June but “gradually improved once brands returned after the Black Lives Matter protests subsided”.

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In a frustration that many web-based companies must share, while Twitter faced a double-digit slump in revenue, web traffic and active users were at nearly historical highs. Twitter reported that its monetizable Daily Active Users reached an all-time high of 186 million while analysts only forecasted 176 million. In comparison, last year Twitter’s mDAU figure came in at 139 million. 

Within the US, revenue totalled $365 million, a decrease of 20% year-over-year while International revenue totalled $319 million, a decrease of 18% year-over-year.

This banner year for traffic, despite a soft economy, presents new opportunities for the company to innovate when delivering its ads, according to CFO Ned Segal. 

“We have completed our ad server rebuild and are making progress accelerating our performance ads roadmap,” said Ned Segal, Twitter’s CFO. “With a larger audience and progress in ads, we are even better positioned to deliver for advertisers when the live events and product launches that bring many people and advertisers to Twitter return to our lives.”

Early reports from its conference call indicate the company is exploring new revenue options like subscriptions.

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The Twitter elephant in the room

Twitter’s earnings call is scheduled for later today, and no doubt its executives will be grilled by analysts and the press on the steps the company is taking to prevent a repeat event from happening. Since the hack occurred, Twitter has disclosed hackers accessed the direct message inboxes of up to 36 of the targeted accounts.

NYSE:TWTR pre-market moves

Twitter released its earnings before the market opened, and the stock is up around 5% pre-market but flat after its close, as traders digested the pre-market moves and locked in their trades for when the opening bell rings. 

Investors will likely be looking to commentary from Twitter executives on how they will ensure a second hack of that magnitude does not occur again before they make moves on the stock.