Twitter stock soars after the company reports adding 20 million users in 3 months
- Twitter shares spiked about 6% in pre-market trading on Thursday after the social network reported record growth in daily active users in the second quarter.
- The company added 20 million users in the period, fueling a 34% year-on-year increase in its userbase to 186 million.
- However, its earnings fell short of Wall Street forecasts as revenue fell 19%, and it posted a net loss of $1.2 billion.
- CEO Jack Dorsey also described last week’s hack — which saw celebrities like Elon Musk and Bill Gates have their accounts compromised — as “a very public and disappointing security issue.”
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Twitter stock jumped about 6% in pre-market trading after the social-media group revealed a record increase in users in the second quarter.
However, its revenue and profits fell short of the consensus forecasts of analysts polled by Bloomberg.
Here are the key numbers:
- Revenue: $683 million versus $705 million estimated.
- Operating income: $124 million loss versus $49.2 million loss estimated.
- EPS: -$1.56 versus -$0.16 estimated.
Twitter’s revenues fell 19% as advertising sales tumbled 23% due to the coronavirus pandemic.
Combined with higher costs, that meant the company posted a net loss of $1.2 billion — a sharp swing from the $1.1 billion in net income it made in the second quarter of 2019.
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More positively, Twitter grew its average daily active user base by 34% year-on-year to 186 million, as it added 20 million users in the three months to June 30.
The robust growth followed a 24% increase in its users to 166 million in the first quarter.
Twitter’s bosses attributed the latest increase to people signing up to join a global conversation about current events, as well as product improvements.
“The elevated usage of our service presents a tremendous opportunity to serve the public conversation and to be where even more people go to see what’s happening,” CEO Jack Dorsey said in his quarterly shareholder letter.
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Dorsey also addressed the hacking of several high-profile Twitter accounts including Joe Biden, Elon Musk, and Warren Buffett last week.
“Twitter suffered a very public and disappointing security issue,” he said in the letter.
The company “moved quickly to address what happened” and has improved its resiliency to social-engineering attempts, rolled out additional safeguards to its systems, and continues to cooperate with law enforcement as they investigate the matter, he added.
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