Twitter’s numbers are out and they are good.
It crushed on revenue, EPS, and monthly active users. The stock is flying, up 26% after hours.
So for the first time as a public company, Twitter has delivered an earnings report that investors absolutely love.
It delivered earnings per share of $0.02 on $312 million in revenue, which is up 124% year-over-year. Both of those soundly smashed expectations. Its revenue guidance for the current quarter was well ahead of expectations, as well.
However, Twitter has always done pretty well against revenue expectations. Where it has struggled is with usage statistics. This quarter, Twitter finally beat analysts’ expectations.
It had 271 million monthly active users (MAUs), versus expectations of 267 million monthly active users. That’s a 24% year-over-year jump in usage, and a 6% increase on a quarterly basis.
The combination of better than expected revenue, EPS, and monthly usage has sent the stock to the moon. In after-hours trading, it was up over 35%.
This is a great report from Twitter, and it’s hard to find much to be negative about. However, if you want to pooh-pooh the numbers you could say this is all about the World Cup, which boosted usage. On CNBC, Twitter CEO Dick Costolo said it was about product changes, not the World Cup.
If you really have your heart set on being negative, you might want to point out that this is all about expectations. Facebook, which has 1.3 billion users, added 41 million users last quarter. Twitter, with just 271 million users, added 16 million users.
Also, as Peter Kafka at Re/code points out, last quarter, monthly active users were up 25% on a year-over-year basis and everyone was negatively freaking out. This quarter, monthly active users were up 24%, and everyone is positively freaking out.
We’ll hear more from Costolo on the call, which starts at 2 PM San Francisco time. We’ll be live blogging it here.
Here are the key numbers versus expectations:
- Revenue: $312 million versus $283.07 million expected
- EPS: $0.02 versus -$0.01 expected
- Monthly Active Users: 271 million versus ~267 million expected (based on 5 analysts polled by Bloomberg)
- Q3 revenue guidance: $330-$340 million versus expectations of $324 million
Here’s a chart from BI Intelligence on user numbers:
And here’s another one on timeline views:
A handy table:
And here’s another one, this time with the forward guidance.
Last quarter, the company shook up its executive ranks with COO Ali Rowghani leaving, and not being replaced. It also appointed Anthony Noto, the Goldman Sachs banker who led its IPO, to the CFO slot.
We were told that the COO decision revolved around Twitter’s need to improve its product to attract new users. The former COO was in charge of product, but there was a feeling in the company that he didn’t have a great product vision.
When Twitter hired Daniel Graf as the new head of product, CEO Dick Costolo wanted Graf reporting into him. That left Rowghani with less responsibility, and ultimately he left Twitter.
We also heard that Rowghani was a key person for talking to analysts and investors. So, when he left, Twitter needed Noto as CFO to fill that slot. With his experience at Goldman Sachs, Noto is perfect for telling Twitter’s story to investors.
After the executive shake up, there’s even more pressure on Costolo. He now has his team in place, and he’s even more responsible for product direction.
Investors are getting weary of seeing Facebook — with 1.3 billion monthly active users — adding more users on a monthly basis than Twitter, which last quarter had just 255 million monthly active users.