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Twitter beats revenue targets with ad improvements, shares jump 7per cent

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:Twitter Inc on Thursday reported higher revenue growth than Wall Street had expected, as the social media platform rolled out ad targeting improvements and said changes by Apple to keep iPhone user data private had hit ad revenue less than anticipated.

FILE PHOTO: A Twitter logo is seen outside the company headquarters in San Francisco
FILE PHOTO: A Twitter logo is seen outside the company headquarters in San Francisco, California, U.S., January 11, 2021. REUTERS/Stephen Lam/File Photo

REUTERS -Twitter Inc on Thursday reported higher revenue growth than Wall Street had expected, as the social media platform rolled out ad targeting improvements and said changes by Apple to keep iPhone user data private had hit ad revenue less than anticipated.

Shares of Twitter jumped 7per cent to US$75 in trading after the bell.

Since the start of the year, Twitter has raced to introduce products in new areas like audio-only chat rooms and newsletter publishing in an effort to turn around years of business stagnation and reach its goal of doubling annual revenue by 2023.

Advertising revenue totaled US$1.05 billion, up 87per cent from the year-ago quarter, and beat Wall Street estimates of US$909.9 million.

Twitter has worked to improve the effectiveness of its ads, which have traditionally lagged larger rivals like Facebook, which holds vast troves of data on users.

Those improvements, along with higher demand from advertisers seeking to reach consumers as countries reopen from pandemic restrictions, helped propel ad revenue, Twitter said.

“As we enter the second half of 2021, we are shipping more, learning faster, and hiring remarkable talent,” Twitter Chief Executive Jack Dorsey said in a statement on Thursday.

Twitter reported 206 million monetizable daily active users (mDAU), its term for users who are served advertising, for the second quarter ended June 30, matching analyst targets of 205.9 million users, according to IBES data from Refinitiv.

During the quarter, the social media company introduced more than 2,500 new topic categories to help users follow content based on their interests. By enabling a more personalized Twitter timeline, the company said it believes it can get more users to stick around.

The San Francisco-based company now expects headcount and total costs and expenses to grow at least 30per cent for the full year, up from its previous guidance of 25per cent, as the company invests in its engineering and product teams.

Its U.S. user base declined by 1 million over three months from the previous quarter due to a lighter news cycle in the United States, Twitter said, with total users worldwide in line with Wall Street targets.

Total revenue, which also includes revenue the company earns from data licensing, rose 74per cent year-over-year to US$1.19 billion, beating analyst estimates of US$1.07 billion.

Twitter forecast third quarter total revenue to be between US$1.22 billion to US$1.3 billion, roughly in line with or slightly ahead of consensus analyst estimates of US$1.17 billion.

On an adjusted basis, Twitter earned 20 cents per share, well above the estimate of 7 cents.

The company said it was still too early to determine the long-term impact of new privacy controls that Apple Inc implemented in April, which are designed to limit digital advertisers from tracking iPhone users without their consent, but added that revenue impact during the second quarter was lower than expected.

Also on Thursday, Snap Inc reported its quarterly revenue grew 116per cent as advertisers flocked to its messaging app Snapchat to reach young consumers.

(Reporting by Sheila Dang in DallasEditing by Sonya Hepinstall)

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