Twitter on Wall Street

Anthony Quintano for Re/code

Media


Twitter did not completely fix its growth problem in its second-quarter earnings today, and it didn’t release a new set of metrics to tell its reach and scale story better to Wall Street.

But it did blow away all earnings expectations, with revenue ($312 million, up 124 percent over the year-ago period) and monthly active users (271 million, up 24 percent year over year) up much higher than expected. Perhaps most importantly, the social communications company showed a two-cent profit rather than the one-cent loss analysts had predicted.

(Hey, analysts, nice work! Not!)

As Peter Kafka reported yesterday, Twitter has had internal discussions about new ways of measuring the service. The company’s core user base last measured at 255 million monthly active users, with investors expecting a rise to between 263 million to 269 million, as well as revenue of $283 million.

(Hey, analysts, nice work! Not, again!)

In addition, Twitter increased its profit and revenue guidance for 2014, another sign of good news for investors. Overall, it’s a nice surprise by the San Francisco-based company, which has struggled of late with a number of significant management upheavals and a growing perception that it is failing to gain enough traction with average consumers.

“Our strong financial and operating results for the second quarter show the continued momentum of our business,” said Twitter CEO Dick Costolo in a statement. “We remain focused on driving increased user growth and engagement, and by developing new product experiences, like the one we built around the World Cup, we believe we can extend Twitter’s appeal to an even broader audience.”

But one of Twitter’s big issues is that its results pale in comparison to social networking behemoth Facebook, which ended its blockbuster Q2 with 1.3 billion monthly users — and nearly $3 billion in advertising revenue.

CNBC’s popular “Mad Money” host Jim Cramer underscored the sour investor sentiment about Twitter in recent weeks: “Frankly, I wouldn’t recommend buying Twitter until it drops back to $29, a huge decline from these levels. Until then, just stick with Facebook.”

(Hey, Jim, ummmm, you know.)

Twitter execs, including outgoing CFO Mike Gupta and incoming one Anthony Noto, will hold a conference call at 2 pm PT to crow about — oops, discuss — the results.

Until the call, here are some Q2 stats to chew on, according to Twitter:

Advertising revenue totaled $277 million, an increase of 129 percent year-over-year.

Mobile advertising revenue was 81 percent of total advertising revenue.

Data licensing and other revenue totaled $35 million, an increase of 90 percent year-over-year.

International revenue totaled $102 million, an increase of 168 percent year-over-year.

International revenue was 33 percent of total revenue.

Twitter shares rose about 1.5 percent today to close at $38.49. Now, no surprise, the stock is up 31 percent in after-hours trading.



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