The numbers: Twitter reported stronger than expected second-quarter earnings on Tuesday with sales of $312 million, more than double from the same period in 2013. Wall Street had predicted revenue of around $283 million. Losses widened to $145 million, or 24 cents per share, from $42.2 million, or 32 cents a share in the year-ago quarter. Twitter also said that monthly active users increased 24% to 271 million. More than three-quarters of those monthly active users were of the mobile variety, or 211 million, a number that jumped 29% year-over-year. The increase in users helped boost ad sales, with advertising revenue more than doubling to $277 million. Of that, 81% of that came from mobile ads.
The takeaway: Although the online message board’s losses grew in the second quarter, its adjusted earnings excluding certain expenses increased two cents per share. It was slightly better than analysts had predicted. Investors will also be thrilled by the better-than-expected increase in monthly users. Based on the positive signs, Twitter’s shares (TWTR) are soaring, up over 20% in morning trading Wednesday. Before the massive post-closing bump, Twitter’s stock had fallen more than 40% on the year, mainly on concerns over a lack of user growth and multiple high-level executive departures.
What’s interesting: Twitter CEO Dick Costolo pointed to the strong second-quarter showing as a sign of the company’s “continued momentum” while noting the specific importance of a growing user base. “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 can extend Twitter’s appeal to an even broader audience,” Costolo said in a statement. The earnings release highlighted some of the new features it rolled out during the World Cup to draw in that sporting event’s huge fan base, including real-time score updates, push notifications, timelines for the games themselves and voting ballots.
Some people were expecting Twitter to use Tuesday’s earnings report to reveal a new set of metrics for measuring the size of its audience beyond just timeline views of active users. But that information was nowhere to be found in the release.
Looking ahead: Twitter expects its third-quarter revenue to fall between $330 million and $340 million.