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Twitter sales, daily active users beat expectations

Emily McCormick

Twitter (TWTR) reported second-quarter sales and daily active users that beat consensus expectations in results released Friday before market open.

Here were the main metrics from the report, compared against consensus analyst estimates compiled by Bloomberg:

  • Revenue: $841.4 million vs. $829.3 million expected

  • Monetizable daily active users (mDAU): 139 million vs 135.4 million expected

Twitter also posted non-GAAP earnings per share (EPS) of $1.58, which included a benefit from a deferred tax asset and which may not compare to adjusted EPS estimates of 19 cents per share, based on Bloomberg-compiled data. Adjusted net income for the quarter totaled $37 million, while adjusted diluted EPS excluding the impact of the tax benefit was 5 cents per share, versus 8 cents a share in the year-ago quarter.

The San Francisco, California-based tech company said its 14% year-over-year growth in second-quarter mDAU was driven by “organic growth, product improvements, and, to a lesser extent, marketing.” Over last quarter, mDAU grew 3.7%.

By region, U.S. mDAU was 29 million for the second-quarter, up 10% over last year, while international mDAU rose 15% year-over-year to 110 million. Results for both geographies came in ahead of estimates.

Shares of Twitter rose 1.13% to $38.65 each as of 7:09 a.m. ET.

During the April quarter, Twitter also exceeded expectations for mDAU, or those that log into a Twitter application on any given day and can see ads.

Twitter previously announced that it would stop breaking out monthly active users after the first quarter of 2019, stating at the time that it believed mDAUs and its related growth were the “best ways to measure [Twitter’s] success.”

Twitter's monetizable daily active usage growth (Twitter)
Twitter's monetizable daily active usage growth (Twitter)

The company’s second-quarter results come on the heels of better-than-expected reports from peer social media platforms Facebook (FB) and Snap (SNAP), presaging strong results from the ad-driven micro-blogging platform.

For the third quarter, however, Twitter’s guidance came in light. The company said it expects total revenue to be between $815 million and $875 million, versus consensus estimates for $871.5 million. Third-quarter operating income is expected to be between $45 million and $80 million.

The company attributed the softer-than-expected top-line guidance in part to recent decisions Twitter has made “to deprecate certain legacy ad formats,” a process the company said would play out over several quarters and have a gradual impact on revenue.

Twitter reiterated guidance to see operating expenses increase 20% over last year during the 2019 fiscal year, as the company continues to “invest for growth and support the priorities we outlined at the beginning of the year: health, conversation, revenue product and sales, and platform.”

Shares of Twitter have risen 32.6% for the year-to-date through Thursday’s close.

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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