Shortly after the recent Twitter hack, the social platform has released its second-quarter earnings report. TWTR stock jumped 4% yesterday but is down over 1% now.
Twitter Inc (NYSE: TWTR) released its Q2 earnings report a week after the massive hack on the social media network. Released on the 23rd of July, the report revealed a lower yield against analyst predictions and a 23% year over year loss in ad revenue. However, the popular social media network recorded growth in the number of its active users.
Yesterday, following the release of the Q2 report, Twitter stock jumped 4.1% to $38.44. However, today, in the pre-market, teh stock is down nearly 1.4%, trading at $37.89.
Twitter Q2 Earnings Results
According to the second-quarter reports, Twitter increased 34% year over year in its average Monetizable Daily Active Users (mDAU). This equals over 180 million users, a 10% increase over the first quarter’s result. The recent increase in mDAUs is facilitated by the global debates on trending events, especially the ongoing coronavirus pandemic.
For instance, Twitter in collaboration with Global Citizen, offered a live-stream of the #TogetherAtHome concert. The concert was held in support of the World Health Organization to encourage people to stay indoors at the peak of the quarantine in March. The concert featured top musical artists, insights from health experts and stories from frontline workers. The live-stream generated over 10 million views and over 2.2 million tweets with the hashtag, #TogetherAtHome. Since Twitter began reporting growth in mDAU, this recent gain is the highest quarterly year over year increase.
Twitter’s chief financial officer, Ned Segal spoke with CNBC’s Squawk Box on the second-quarter earnings and the recent twitter hack. Speaking on the recent surge in active Twitter users, the CFO said the growth appears permanent even as lockdown eases globally.
In addition, Twitter recorded $683 million in revenue, which is $24 million lesser than analysts’ expectations. However, this represents a 19% year over year loss for the second quarter. In the same period last year, Twitter recorded $727 in total revenue. Also, ad revenue declined 23% year over year.
Referring to profitability earnings for the second quarter, the report said:
“Total costs and expenses grew 5% year over year to $807 million, as we continue to balance targeted headcount growth with further reducing lower priority investments, resulting in an operating loss of $124 million.”
Twitter Rebuilds Ad Server
In March, Twitter’s ad business suffered a hit due to the pandemic in the U.S.
However, the Q2 report revealed that Twitter is gradually recovering:
“We (Twitter) saw a gradual, moderate recovery relative to March levels throughout most of Q2, with the expectation of late May to mid-June, when many brands slowed or paused spend in reaction to US civil unrest.”
In the second quarter of 2020, Twitter completed its ad server rebuild to scale its advertising arm. Back in 2019, Twitter blamed its stock decline in the third quarter on its advertising productivity. The rebuild of its ad server will help Twitter reinforce the foundation of its ad business, the company added. Twitter CEO Jack Dorsey has also said he will ensure the new line of revenue is “complementary to our (Twitter) advertising business.