Does This Earnings Report Mark a New Beginning For Twitter?

Media

Published: July 28, 2015 5:02 pm

Last Updated: April 27, 2020 8:25 pm

Twitter Inc. (NYSE: TWTR) released its second-quarter earnings report after the market closed on Tuesday. The social media company had $0.07 in earnings per share (EPS) on $502 million in revenue versus Thomson Reuters consensus estimates of $0.04 in EPS on $481.28 million in revenue. The same period from last year had $0.02 in EPS on $312.17 million in revenue.

The company gave guidance for both the third quarter and the full year. For the third quarter Twitter expects revenue to be in the range of $545 million to $560 million, while for the full year revenue is expected to be in the range of $2.20 billion to $2.27 billion. There are consensus estimates of $555.78 million in revenue for the third quarter and $2.20 billion in revenue for the full year.

During the second quarter, Twitter launched a new autoplay feature for native videos, Vines and GIFs, as well as Periscope live video streaming on Android. Also the company acquired TellApart, a marketing technology company providing retailers and e-commerce advertisers with unique cross-device retargeting capabilities through dynamic product ads and email marketing, and Whetlab, a startup focused on machine learning and artificial intelligence.

Average Monthly Active Users (MAUs) totaled 316 million for the second quarter, up 15% from the previous year, and up 2.6% compared to 308 million in the previous quarter. The vast majority of MAUs added in the quarter on a sequential basis came from SMS Fast Followers. Excluding SMS Fast Followers, MAUs were 304 million for the second quarter, up 12% year-over-year, and 302 sequentially. Mobile MAUs represented approximately 80% of total MAUs.

Jack Dorsey, interim CEO of Twitter, said:

Our Q2 results show good progress in monetization, but we are not satisfied with our growth in audience. In order to realize Twitter’s full potential, we must improve in three key areas: ensure more disciplined execution, simplify our service to deliver Twitter’s value faster, and better communicate that value.

Shares of Twitter closed Tuesday up 5.3% at $36.54 on a 52-week trading range of $33.51 to $55.99. Shares were up 5.7% at $38.62 in the after-hours trading session. The stock has a consensus analyst price target of $45.32.

It is still worth noting that Twitter is valued wildly high at over 100 times earnings.

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