Twitter stock jumps after 2nd-quarter revenue grows sharply

NEW YORK – Twitter surprised investors with a strong earnings report Tuesday even as the company searches for a permanent CEO and faces ongoing challenges growing its user base.

San Francisco-based Twitter Inc. posted a loss of $136.7 million, or 21 cents per share, in the April-June period. That compares with a loss of $144.6 million, or 24 cents per share, a year earlier.

Adjusted earnings were 7 cents per share, above the 5 cents that analysts surveyed by Zacks Investment Research had expected.

Revenue jumped 61 per cent to $502.4 million from $312.2 million. Analysts had expected lower revenue of $487.4 million.

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Interim CEO Jack Dorsey said that while the results show “good progress in monetization,” the company is “not satisfied” with the growth of its audience.

READ MORE: Twitter is only considering CEO candidates who can make a ‘full-time’ commitment

On average, Twitter had 316 million monthly active users in the second quarter, up 15 per cent year-over-year but up less than 3 per cent from the first quarter of this year.

User growth has been an ongoing challenge for Twitter, as it tries to make its service a mass-market product rather than a niche short-messaging service popular with journalists, celebrities and young people.

For the current quarter ending in September, Twitter said it expects revenue in the range of $545 million to $560 million. Analysts surveyed by Zacks expected revenue of $563.9 million.

The company expects full-year revenue in the range of $2.2 billion to $2.27 billion.

Twitter’s shares rose $2.07, or 5.7 per cent, to $38.61 in after-hours trading.

Twitter shares have increased roughly 2 per cent since the beginning of the year, and have been trading near a 52-week low. They closed Tuesday at $36.54, a decline of nearly 4 per cent in the last 12 months.