Twitter Inc. reported strong user growth but experienced lingering impacts from the coronavirus pandemic in its latest quarter, as the company navigates a rocky advertising climate and the fallout from a major security breach.
On Thursday, the San Francisco social media company said its daily user base rose 12% to 186 million in the three months ended June 30 from the quarter before, a stronger increase than analysts polled by FactSet had expected.
Twitter’s revenue fell 19% in the second quarter from a year earlier to $683 million, missing the consensus estimate from analysts of $702 million, according to FactSet. In the previous quarter, Twitter declined to provide forecasts for revenue or operating income, citing virus-related economic uncertainty and rapidly shifting market conditions. For the same reasons, the company didn’t provide guidance for those metrics in its latest earnings report.
The company swung to a loss of $1.23 billion, noting that its results were impacted by a reversal of a more than $1 billion tax benefit recorded in 2019. Excluding the tax item, Twitter’s loss was steeper than analysts had forecast. “Our number one priority is making sure our road map is strong and moving fast,” Chief Executive Jack Dorsey told analysts on an earnings call. “This quarter is a great example where you saw a lot of under-the-hood work.”
Twitter’s shares rose more than 4% Thursday. The stock has gained 20% so far this year, compared with a modest gain in the S&P 500. “People are looking ahead and saying the worst is over,” said MoffettNathanson analyst Michael Nathanson. “If Twitter can fix this marketing issue, if they can attract more advertisers, they have the traffic to grow revenue.”
Todd Horwitz Chief Strategist BubbaTrading.com
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