Business Essentials for Professionals

Twitter Beats Q2 Revenue And EPS Estimates And Tout Its New Customer Metric


Twitter Beats Q2 Revenue And EPS Estimates And Tout Its New Customer Metric
Twitter beat analysts’ estimates on revenues in the second quarter which came in at $841 million on the over all, marketing a year on year growth of 18 per cent. The company reported EPS and net income at $1.43 and $1.1 billion respectively, which the company attributed to a “significant income tax benefit” that it got in relation to it establishing of a deferred tax asset for corporate structuring for certain markets.
Excluding that benefit, the company’s second quarter net income was at $156 million while the non-GAAP diluted EPS was at $0.20.
The new, preferred audience metric now for Twitter is the Monetizable Daily Active Users which was at 139 million and is 14 per cent higher year on year according to twitter.
Economic analysts expected EPS to for the second quarter to come in at about $0.19 on revenues of just over $829 million and the company beat those estimates. In the second quarter a year ago, an EPS of $0.17 on sales of $710.5 million was posted by Twitter while the figures in the first quarter was $787 million in revenues and a diluted EPS of $0.25.
Twitter said that a major chuck of its revenues was generated from the United States which accounted for $455 million of its sales which was 24 per cent more than the comparable period a year ago. The company also ramped up revenue of in its foreign markets which was a 12 per cent year on year jump. The second largest market for Twitter was Japan which accounted for $133 million of its overall sales, at a year on year growth rate of 9 per cent.
The company said that it still generated most of its revenues from advertising – which explains why the company now prefers to measure users according to the mDAUs metric, which generated revenues of $727 million during the quarter which was 21 more compared to the same period a year ago. Video ad formats “continued to show strength”, noted Twitter and signaled out the major contributors to be Video Website Card, In-Stream Video Ads and First View ads. There was a 4 per cent revenue increase in data licensing, the other component of Twitter’s business model, at $114 million.
Analysts pointed out the importance of the new metric called “monetizable daily active users” that has been introduced by Twitter as a replacement for monthly and daily active users, which, according to the company, is based on the count of those twitter users who logged in or were “otherwise authenticated and accessed Twitter on any given day through or Twitter applications that are able to show ads.”
The company is still relatively young, and continues to tinker and make changes — some big, some small — to both its back end and user interface. Some have been made to address some of the larger issues that people have been (often critically) vocal about, such as coping with harassment or making the site more user-friendly for power-Tweeters, new adopters and everyone in between. Others are to continue building Twitter as a business, which means making it more advertising and media-partner friendly.