Twitter revenues fall 5% in Q2, sees no improvement in H2

Thursday 27 July 2017 | 13:33 CET | News
Twitter reported a further drop in revenues for the second quarter, but posted better-than-expected adjusted EBITDA. The company warned that revenue growth is unlikely to improve in the second half of the year, as it works further on refining its product offering. 

Revenues fell 5 percent year-on-year to USD 574 million in Q2, compared to an 8 percent annual fall in Q1. While ad revenue dropped 8 percent, data licensing and other revenue was up 26 percent to USD 85 million. 

The company said it also grew strongly in video, with a good initial response from advertisers to its new offerings. The amount of live premium video on the platform increased to over 1,200 hours in the quarter, and the number of unique viewers rose to over 55 million from 45 million in the previous quarter. 

However, Twitter said it does not expect to see its revenue growth rate improve in the rest of 2017 due to headwinds in the second half of approximately USD 75 million associated primarily with de-emphasized revenue products. This had an impact already in Q2, with less focus on TellApart. Excluding the impact of these headwinds, the company said it "could see an improvement in total revenue growth by Q4 2017".

Adjusted EBITDA improved slightly to USD 178 million or 31 percent of revenue in Q2, compared to USD 175 million a year ago. The figure was much better than Twitter's forecast of USD 95-115 million and a margin of 21-21.5 percent, and the company said the result should reach USD 130-150 million in Q3.

The company made less progress on its goal of a net profit. The quarterly net loss widened to USD 116 million or 16 cents a share, compared to a loss of USD 107 million or 15 cents a share in the same period last year. Twitter said that excluding a USD 55 million cost-method investment impairment charge, it would have made progress toward profitability and further reduced its net loss.

Average monthly active users totaled 328 million for the quarter, up 5 percent year-over-year but flat versus Q1. Daily active users grew 12 percent year-over-year, marking the third consecutive quarter of double-digit growth.

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