Twitter stock soars after the company reports adding 20 million users in 3 months
- Twitter shares spiked about 6% in pre-market trading on Thursday after the social network reported record growth in daily active users in the second quarter.
- The company added 20 million users in the period, fueling a 34% year-on-year increase in its userbase to 186 million.
- However, its earnings fell short of Wall Street forecasts as revenue fell 19%, and it posted a net loss of $1.2 billion.
- CEO Jack Dorsey also described last week's hack - which saw celebrities like Elon Musk and Bill Gates have their accounts compromised - as "a very public and disappointing security issue."
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On Thursday, Twitter stock jumped almost 6% after the social-media group revealed a record increase in users in the second quarter.
However, its revenue and profits fell short of the consensus forecasts of analysts polled by Bloomberg.
Here are the key numbers:
- Revenue: $683 million versus $705 million estimated.
- Operating income: $124 million loss versus $49.2 million loss estimated.
- EPS: -$1.56 versus -$0.16 estimated.
Twitter's revenues fell 19% as advertising sales tumbled 23% due to the coronavirus pandemic.
Combined with higher costs, that meant the company posted a net loss of $1.2 billion - a sharp swing from the $1.1 billion in net income it made in the second quarter of 2019.
More positively, Twitter grew its average daily active user base by 34% year-on-year to 186 million, as it added 20 million users in the three months to June 30.
The robust growth followed a 24% increase in its users to 166 million in the first quarter.
Twitter's bosses attributed the latest increase to people signing up to join a global conversation about current events, as well as product improvements.
"The elevated usage of our service presents a tremendous opportunity to serve the public conversation and to be where even more people go to see what's happening," CEO Jack Dorsey said in his quarterly shareholder letter.
Dorsey also addressed the hacking of several high-profile Twitter accounts including Joe Biden, Elon Musk, and Warren Buffett last week.
"Twitter suffered a very public and disappointing security issue," he said in the letter.
The company "moved quickly to address what happened" and has improved its resiliency to social-engineering attempts, rolled out additional safeguards to its systems, and continues to cooperate with law enforcement as they investigate the matter, he added.
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