News Column

Twitter revenue soars

July 29, 2014

By Elizabeth Weise, USA TODAY

Twitter shares surged in after-hours trading with news that revenue for the microblogging site handily beat Wall Street's expectations.

The site's second-quarter revenue rose 124%, to $312 million, from the same quarter a year ago.

"Surprise surprise, Twitter had a great quarter," said Debra Aho Williamson, an analyst with market research firm eMarketer.

"Nobody was expecting it. They really outperformed in just about every metric that we can see," she said.

Revenue was expected to rise to $283.4 million. The $312 million far exceeded that prediction.

Twitter reported earnings of two cents per share. The earnings beat analysts' estimates of a loss of a penny a share, as polled by FactSet.

The results, announced after markets closed, sent Twitter shares up 35%, to $52.28, in after-hours trading.

"Our strong financial and operating results for the second quarter show the continued momentum of our business," Twitter CEO Dick Costolo said. "We remain focused on (driving) user growth and engagement."

The San Francisco-based company has become the go-to site for news, celebrities and sports. It gained 16 million users in the second quarter, up from 255 million monthly active users in December. Those users sent an average of 500 million Tweets a day.

The number was a vindication for a company under increasing pressure from investors to grow its user base.

Twitter's audience is larger than simply its monthly active users, Costolo said in a call with investors after the report was released. "We believe (we rank) among the top 10 largest digitally connected audiences in the world."

Twitter's user base in the United States "has begun to mature" and is expected to grow 11.6% this year, said Williamson.

Currently, its fastest growth is in the Asia-Pacific region, with its user base there expected to increase more than 33%. Asia will account for one-third of all Twitter users by the end of the year, compared with 24% in North America, eMarketer estimated.

Twitter's advertising revenue reached $277 million, an increase of 129% year-over-year. Mobile made up 81% of that, notable because of the general stampede of users to mobile devices.

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Source: USA Today

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