Twitter Posts Impressive Q2 Report

Micro-Blogging Site Has More Money, More Users

Twitter released their second quarter earnings report yesterday, closely following Facebook’s own report earlier in the week. Just like Facebook, Twitter’s profitability has vastly increased over the last year – a fact which not only kept it at pace with its social networking rival but which also countered the expectations of many experts, who expected the site to lose a penny per share.

In actuality Twitter posted earnings per share of $0.02 with revenue of $312 million, up 124% from the same period a year ago – in this quarter last year the company posted earnings of $139.3 million. 81% of this revenue, $224 million, came from mobile advertising.

User numbers were also up 24% from last year to 271 million – again beating analysts’ expectations of 266 million. Perhaps more importantly the site saw a 15% increase in ‘Timeline Views’ – how often users refreshed their own or some else’s feed – to 173 billion. This means that not only does Twitter have more users, but they are also looking at more stuff. Twitter attributed a significant aspect of this to the World Cup; Germany’s 7-1 defeat of Brazil was the most tweeted event in history, with a peak of 580,000 tweets per minute.

The report caused Twitter’s share price to rise 30% - extremely good news for a company which only went public last November. Twitter is still posting a net loss, more so than ever: $142 million in this report, up from $45 million this time last year. No one was expecting the company to be making a gross profit, however, and by exceeding all expectations Twitter has pleased its shareholders and investors, ensuring that it will retain the support that it needs to build towards gross profitability.

Twitter still lags behind Facebook in terms of user base, with 271 million compared to the latter’s 1.3 billion. Twitter’s user numbers are increasing, however, while Facebook is experiencing a slow bleed.  On the other hand Facebook’s profitability allows it pursue an aggressive acquisition strategy; it purchased Instagram in 2012, and with it 30 million users. Even if Facebook’s original site falters, it has its fingers in so many pies at this point that its overall outlook remains robust. Side-by-side comparisons in this area aren’t particularly useful though, as Twitter has a fundamentally different nature to Facebook – it takes far fewer users to create a thriving Twitter community than it does for the equivalent on Facebook.

Overall it is not so much the impressive numbers themselves which Twitter’s bosses will be so pleased with (although of course they won’t be unhappy with them) so much as the extent to which Twitter defied the experts’ predictions of failure. The fact that it is still working to become profitable means that it relies upon the support of the investment community to remain a valuable property; it is worth as much as people think it is, and after these results people will think that it’s worth a whole lot more.

Douglas Clarke-Williams

Douglas is an English Literature graduate who has written about everything from music to food to theatre, now a content creator for Social Media Frontiers. No topic too large or too small. Follow him @DouglasAtSMF.

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