When Twitter went public in November 2013, the shares traded at $26. There was a lot of hype around the company and the future growth potential and the market continued to push up the share price and valuation of the social media company. Just a month later the shares had reached their peak at almost $75! But it went downhill from there. The stock dropped below $40 this month and investors were already running scared that the share price would be approaching the IPO level if this quarterly report was not meeting expectations.
Well, Twitter delivered on pretty much all front, here are the highlights:
- Revenue: $312.2 million (compared to $139.9 million last year)
- Mobile advertising revenue: 224 million – 81% of total ad revenue
- Net loss: $144.6 million (compared to $42.2 million last year)
- 271 million average active users (increase of 24% from last year)
- 173 billion timeline views (up 15% compared to last year)
- Revenue projection:
Twitter shares jumped 30% in after-market trading and these numbers should stop the negative trend the stock has had all year.
The company seems to have found ways to finally have significant impact on their advertising income, especially the fact that 81% of that revenue was mobile advertising is encouraging.
There are a few questions we have though: a lot of the growth Twitter has seen was during the World Cup when new users took to tweeting and it was also a major event that kept people engaged. What is the strategy to continue the user growth and engagement?
In addition to that the company needs to start showing progress on the profitability side as well. Last month they hired Anthony Noto, a former Goldman Sachs executive, with him steering the financials we are confident there is a well thought through plan in place.