The highest ever annual growth of daily users who can view ads was reported by Twitter Inc beating estimates of analysts of usage. This news sent the shares of the company up by 6% in pre market trading in the United States on Thursday.
But despite the historic growth in usage, Twitter reported lower than expected quarterly revenue because of the novel coronavirus pandemic which hammered the digital ad revenues of the company that are based largely on events.
There was a drop of 23 per cent in ad sales of Twitter at $562 million. Ad sale accounts for 82 per cent of the total revenues of the company. According to the company, the fall in ad sale was because of pause by the company in brand spending due to the pandemic as well as the civil unrest in the United States. According to IBES data from Refinitiv, ad sale expected by analysts was at $585 million.
But even though advertisers refrained from advertising on the micro blogging platform because of the current events and issues, there were more people coming on to the platform to debate and discuss those issues. That caused a 34 per cent year on year growth in the number of average monetizable daily active users (mDAU) on Twitter at 186 million which was well above he estimate of analysts at 176 million.
Twitter has found it hard to develop its own ad offerings that has made it reliant on a suite of promotional tools which are specifically designed to cache on in on advertising opportunities during big events and product launches and these are the very specific things that have gone missing during the pandemic.
Development of its ad management technology had been completed in the second quarter, the company said, which will now enable the company to support faster development of new formats in the near future. Twitter said that it was also in the process of launching of measurement tools for "direct response" ads that are utilized by app developers.
There was a 19 per cent year on year drop in total revenue of Twitter, at $683 million, despite a steady growth in sales revenues from the licensing of users' posts to researchers and marketers.
Thee the reversal of a tax benefit established last year largely resulted in Twitter also reporting a second-quarter loss of $1.2 billion. The company had transferred its intellectual property to Ireland last year. But Twitter did not make enough revenues to take advantage of the tax benefit because of the steep coronavirus-related losses in the second quarter.
The company incurred a loss of $127 million, or 16 cents per share when adjusted to exclude the tax considerations which was more or less in line with the expectations of analysts of a loss of $125 million. It had an adjusted profit last year of $37 million.
For the rest of the year, Twitter expects revenues from data licensing to "moderate". The company as also exploring "subscriptions and other approaches to complement our advertising business," even though no revenues because of the efforts this year was expected by it, Twitter also said.
(Source:www.nasdaq.com)
But despite the historic growth in usage, Twitter reported lower than expected quarterly revenue because of the novel coronavirus pandemic which hammered the digital ad revenues of the company that are based largely on events.
There was a drop of 23 per cent in ad sales of Twitter at $562 million. Ad sale accounts for 82 per cent of the total revenues of the company. According to the company, the fall in ad sale was because of pause by the company in brand spending due to the pandemic as well as the civil unrest in the United States. According to IBES data from Refinitiv, ad sale expected by analysts was at $585 million.
But even though advertisers refrained from advertising on the micro blogging platform because of the current events and issues, there were more people coming on to the platform to debate and discuss those issues. That caused a 34 per cent year on year growth in the number of average monetizable daily active users (mDAU) on Twitter at 186 million which was well above he estimate of analysts at 176 million.
Twitter has found it hard to develop its own ad offerings that has made it reliant on a suite of promotional tools which are specifically designed to cache on in on advertising opportunities during big events and product launches and these are the very specific things that have gone missing during the pandemic.
Development of its ad management technology had been completed in the second quarter, the company said, which will now enable the company to support faster development of new formats in the near future. Twitter said that it was also in the process of launching of measurement tools for "direct response" ads that are utilized by app developers.
There was a 19 per cent year on year drop in total revenue of Twitter, at $683 million, despite a steady growth in sales revenues from the licensing of users' posts to researchers and marketers.
Thee the reversal of a tax benefit established last year largely resulted in Twitter also reporting a second-quarter loss of $1.2 billion. The company had transferred its intellectual property to Ireland last year. But Twitter did not make enough revenues to take advantage of the tax benefit because of the steep coronavirus-related losses in the second quarter.
The company incurred a loss of $127 million, or 16 cents per share when adjusted to exclude the tax considerations which was more or less in line with the expectations of analysts of a loss of $125 million. It had an adjusted profit last year of $37 million.
For the rest of the year, Twitter expects revenues from data licensing to "moderate". The company as also exploring "subscriptions and other approaches to complement our advertising business," even though no revenues because of the efforts this year was expected by it, Twitter also said.
(Source:www.nasdaq.com)
