In the age of Facebook, social media companies like Twitter and Snap are having trouble holding onto active users. But earnings from Twitter and Snap Thursday indicate that both are doing a better job of generating revenue from the users that have stuck around.
Twitter’s advertising revenue rose 29% year-over-year to $650 million, well above Wall Street’s consensus estimate of $593 million. That growth was impressive given that Twitter’s 326 million average of monthly active users in the quarter was not only below the 330 million that analysts had expected, it was also below the 330 million monthly users of a year ago, and the 335 million monthly user one quarter ago.
People who stay on Twitter are using it more, however. Daily active users rose 9% (although that growth rate was below the 14% rate three months ago). That’s enough to allow Twitter to serve more ads, which boosts revenue. Twitter, which reported earnings early Thursday, saw its shares rise more than 15% during active trading.
Snap, meanwhile, reported earnings after the stock market closed Thursday. Snap’s revenue rose 43% to $298 million, while posting a net loss of 25 cents a share. Both slightly surpassed analyst estimates. Meanwhile, active users were up 5% over the past year, while they fell 1% in the past quarter.
But Snap’s stock tumbled nearly 9% in after-hours trading to $6.28 after rising 6% in regular trading.
Update: This article was updated with a more current stock price for Snap.
