Twitter users are growing and the stock market is pleased

Twitter stock market bull generic

Although the world had predicted a public stoning of Twitter following Tuesday’s second-quarter earnings result, the company managed to duck the lobbed spitballs.

It beat analyst expectations on almost every metric. Revenue was $312 million compared to the $283 million predicted. The company even posted a profit of 2 cent earnings per share, as opposed to the expected loss of one cent per share, when excluding stock-option compensation.

But as anyone following Twitter news knows, the real proof in the pudding for this company is user growth. Although the user numbers could certainly have been better, they still topped industry expectations. As of June 30, Twitter’s average monthly active users were 271 million, a solid chunk larger than the 267 million expected based on a Bloomberg analyst poll number. That 271 million represents a 24 percent growth in users from the same quarter last year.

Investors were pleased, and the stock jumped 30 percent after the report came out.

A reoccurring theme on the earnings call was the fact that there are varying ways to measure Twitter’s influence. CEO Dick Costolo was quick to point out — on several occasions — that the company sees hundreds of millions of impressions from unique visitors who never log in. As a result, these individuals aren’t counted in the monthly active user number, but still contribute significantly to Twitter’s reach.

Costolo also pointed to Twitter’s real-time presence on major media channels. “Twitter is everywhere. It’s all over TV,” Costolo said on the call. “When events happen in the world whether the joy of the World Cup or the tragedy of [Malaysia Airlines Flight] 17…People talk about what’s [being said] on Twitter right now.”

Since the company has previously struggled with monthly active user growth, it’s natural that it would look to other metrics to prove Twitter is scaling. The earnings call showed that the Twitter execs were eager to distinguish between Twitter’s “content creators” — the people tweeting and responding to other tweets — and the passive consumers of said content. Although Twitter isn’t yet trying to monetize its passive unique visitors, it’s starting to cater content towards them.

 

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