Friday 26 July 2019 3:27 pm

Twitter shares rise on second quarter revenue boost

Twitter has posted a strong rise in revenue for the second quarter as its user numbers jumped, pushing shares up more than 10 per cent.

The social media firm reported an 18 per cent increase in revenue to $841m (£677m), while monetisable daily active users rose 14 per cent to 139m.

Read more: Twitter buys fake news-fighting startup Fabula AI

The strong trading was driven by a 21 per cent rise in advertising revenue, which makes up roughly 86 per cent of Twitter’s income.

In a welcome sign for brands, total ad engagements on the platform rose 21 per cent year-on-year. Earlier this year Twitter announced plans to improve ad formats on its mobile app in a bid to improve visibility.

Data licencing – the company’s other major source of revenue – pulled in $114m over the quarter, marking a four per cent increase.

Net profit hit $1.1bn over the quarter, up from $191m in the previous three months. However, the figures were boosted by an income tax benefit of more than $1bn related to corporate restructuring.

Social media firms such as Twitter have come under fire in recent months for their failure to police harmful content posted to their platforms, and a decline in public trust has threatened to shake advertiser confidence.

But Twitter, which recently rolled out a redesign of its desktop display, has proved more resilient to concerns over user safety than rivals Facebook and Instagram.

Chief executive Jack Dorsey said: “Health remains our top priority and we are proud of the work we did in the second quarter. Our focus was on ensuring that our rules, and how we enforce them, are easy to understand. 

“We also continued our work to proactively identify and address malicious behavior, resulting in an 18 per cent drop in reports of spammy or suspicious behavior across all Tweet detail pages, which show the replies to any given Tweet on our service.”

Mazen Hussain, director of paid media and creative at marketing agency Croud, said: “The top priorities for the platform should be to improve the health of its feeds; ensuring that users can find credible information on Twitter and break free of abusive content; and making sure it continues to offer innovative ad formats that complement rather than disrupt the user experience so advertisers continue to buy.”

Investors had a keen eye on Twitter’s figures for daily active users, a metric the firm only introduced in its last quarterly report.

Read more: Twitter suspends 166,000 accounts in battle against online terrorism

“Growth in monetisable daily active users is encouraging for advertisers as it is meant to provide a better understanding of how engaged users are on the platform – something which advertisers are always looking for more of,” said Jim Cridlin, global head of innovation at WPP agency Mindshare.

Twitter said it expects to post revenue of between $815m and $875m in the third quarter, with operating profit of $45m to $80m.

Main image credit: Getty