By Adam Fraser
Twitter has announced its Q2 results to the stock market.
At a high level the company disappointed the market on lower than expected Q3 guidance and the stock fell 10% post the announcement.
If you want to dive into all of the detail, you can check the financials, investor presentation (also broadcast via Periscope!) and investor conference call. If you want the key highlights here are 10 key takeaways:
- Monthly active user (MAU) numbers grew slightly to 313m from v 310m last quarter (up 1.0%) and 304m a year ago (3.0% growth); the return to growth is encouraging but the pace remains insignificant compared to other social networks
- 21% of Twitter’s MAUs (66m) are based in the USA; user numbers in the USA are broadly flat with most of the user growth coming internationally
- Mobile MAUs were 82% of users, indicating Twitter sits in between Facebook ( 90%+ mobile users) and LinkedIn (approx 60% mobile users) for mobile penetration; mobile ad revenue was 89% of total ad revenue
- Revenue at $602m was 1% up on the prior quarter of US$595m and 20% higher than $502m a year ago; the market was expecting slightly higher
- The breakdown of revenue for the quarter was broadly consistent with recent periods, with just under 90% of revenue coming from advertising and circa 10% coming from data licensing/other (the ‘big data’ aspect has huge potential for Twitter). Video ads are certainly growing but generally cannibalising marketing budget from other types of Twitter ads
- Total ad engagements grew 226% year-over-year, an acceleration in growth compared to the prior quarter; the average cost per engagement fell 64% year-over-year, again primarily due to the shift to auto-play video
- Twitter made a loss of US$107m for the quarter but also discloses “adjusted EBITDA” which showed a profit of US$174m after adjusting for stock based compensation, depreciation and amortisation. Twitter ended the quarter with a healthy US$3.6bn in cash.
- Growth in Periscope is important and encouraging: a number of further features have been added in the quarter and the integration with the main Twitter platform is tighter now
- By product, Promoted Tweets with video is now Twitter’s single largest revenue generating ad format and remains its fastest growing ad format
- Twitter is preparing the launch of additional features and functions including accurate audience verification, reserved buying, and reach and frequency planning and purchasing
CEO Jack Dorsey stated “We’ve made a lot of progress on our priorities this quarter. We are confident in our product roadmap, and we are seeing the direct benefit of our recent product changes in increased engagement and usage. We remain focused on improving our service to make it fast, simple and easy to use, like the ability to watch live-streaming video events unfold and the commentary around them.”
Jack remains confident. With advertising demand softer than expected, the market is not so sure and the takeover rumours around Twitter may well start to surface again.