Twitter on Thursday reported strong revenue growth for the second quarter, citing “revenue product improvements, strong sales execution and a broad increase in advertiser demand” as primary drivers of the growth.
Twitter reported revenue of USD$1.19 billion for the quarter, beating analysts’ estimates of USD$1.07 billion. This was a growth of 74% on a year-over-year basis, which marked the company’s strongest growth since 2014, according to CNBC.
The social media giant also reported earnings of USD$0.20 per share, crushing analysts’ estimates of USD$0.07. Twitter shares rose 7% to USD$75 in after-hours trading following the earnings release.
Revenue product improvements, strong sales execution and a broad increase in advertiser demand contributed to 87% year-over-year growth in ad revenue in Q2.
A reinvigorated advertising business led Twitter’s second quarter rebound, with ad revenue up 87% year-over-year to USD$1.05 billion for the quarter, beating analysts’ estimates of USD$909.9 million.
The company has recently worked to improve the effectiveness of its ad targeting and tracking capabilities, which have traditionally lagged behind rivals like Facebook which maintains vast troves of data on its users.
“We continued to make significant progress on our direct-response and brand products with updated ad formats, improved measurement and better prediction. We are driving more value for advertisers with our strong push into performance-based advertising and expanded offerings for small and midsized businesses,” said CFO Ned Segal.
While Twitter’s revenue is mostly generated from advertising, the company diversified its revenue away from ad spend in the latest quarter by introducing its first subscription service, Twitter Blue, in Canada and Australia. The service gives users access to an Undo Tweet button, along with a number of other features.
We are driving more value for advertisers with our strong push into performance-based advertising and expanded offerings for small and midsized businesses
The social media giant also rolled out a number of other features, including Twitter Spaces – an audio chat feature on mobile devices for all users with at least 600 followers – and a ‘Tip Jar’ feature that lets people send money to others on the social network.
It added that new privacy controls in Apple’s iOS 14.5 release, which are designed to limit digital advertisers from tracking iPhone users without their consent, had a lower-than-expected impact on revenue in the second quarter.
Twitter also reported 206 million average monetizable daily active users (mDAU) as of 30 June, up 11% year-over-year and 7 million more than its total at the end of the first quarter.
While the company grew its mDAU overall, its mDAU in the U.S. fell from 38 million in the first quarter to 37 million in the second quarter. The company attributed this to “lighter news cycles” in the U.S. “Longer-term, we remain confident in our ability to accelerate mDAU growth in both the U.S. and international markets,” it said.
There’s a tremendous opportunity to get the whole world to use Twitter.
Twitter has also forecast third quarter total revenue to be between USD$1.22 billion to USD$1.3 billion, roughly in line with or slightly ahead of analysts’ estimates of USD$1.17 billion.
“As we enter the second half of 2021, we are shipping more, learning faster, and hiring remarkable talent,” CEO Jack Dorsey said in a statement on Thursday. “There’s a tremendous opportunity to get the whole world to use Twitter.”
The company’s stock is up about 29% since the start of 2021, slightly outpacing the gains of Facebook and Snap.