Twitter beats revenue expectations after advertising revamp
Twitter has reported better-than-expected revenue growth in its second quarter as the social media site reaped the rewards of an overhaul of its advertising service.
The tech firm posted total revenue of $1.19bn in the three months to the end of June, up 74 per cent on the same period last year and ahead of Wall Street estimates.
The growth was driven by an 87 per cent rise in advertising revenue to $1.05bn, which also beat expectations.
Twitter has shifted its focus to improving the effectiveness of its ads, introducing 2,500 new topic categories over the quarter to help users find content relevant to them.
This provides more data for the platform to use for ad targeting, the company said.
“We get great signal about what people are most interested in, where they are or the places they care about,” Twitter chief financial officer Ned Segal told reporters.
The social media firm’s ad revenue was also boosted by restored confidence among businesses and expanded ad budgets as countries begin to recover from the pandemic.
Twitter reported 206m monetisable daily active users — the measurement it uses to record users who can be targeted by adverts — which was in line with expectations.
Its US user base declined by 1m compared to the previous quarter, which Twitter blamed on a lighter news cycle. Activity surged in the first quarter due to the storming of the Capitol and the fallout linked to former US president Donald Trump, who has since been banned from the platform.
“Twitter has benefited from the general return of advertising dollars/pounds to the market and especially the balance of that return, which is more focused on digital channels than pre-pandemic,” said Tom Johnson, chief transformation officer at WPP’s Mindshare.
“As a news and event led platform, Twitter is many people’s view onto the world and so the pandemic has conversely been quite good for the platform as people have sought out news. This, coupled with continuing innovation in its product line, such as its live audio chat room function ‘Spaces’, means that Twitter is continuing its positive trajectory.”
Twitter added that it expected headcount and total costs and investments to increase at least 30 per cent over the full year — up from its previous guidance of 25 per cent — as it pumps money into its engineering and product teams.
Chief executive Jack Dorsey, a longtime proponent of bitcoin, last night said the digital currency was a “big part” of Twitter’s future and could be used for ecommerce transactions on the platform or to tip popular content creators.