Twitter said revenues passed expectations in the second quarter, rising 74 percent from the year before to USD 1.9 billion. The figure reflects better-than-forecast performance across all major products and geographies. It helped drive up the operating profit to USD 30 million from a loss of 274 million, and the operating margin to 3 percent from minus 40 percent. The number of average daily users jumped 11 percent to reach 206 million, with an increase of 7 million on a sequential basis.
Twitter said it continued to improve its brand and direct response ad products in the quarter, with updated formats, measurement and prediction. Ad revenue leaped 87 percent in Q2 to USD 1.05 billion, helped by revenue product improvements, strong sales execution and a broad increase in advertiser demand.
US revenue lifted 79 percent to USD 653 million while international revenue went up 69 percent to USD 537 million. Japan remains the company’s second largest market, growing 40 percent and contributing USD 151 million, or 13 percent of total revenue. Revenue from the country declined on a sequential basis, reflecting typical country-specific seasonality. Data licensing and other revenue advanced 13 percent to USD 137 million, driven mainly by MoPub.
The company's net profit improved to USD 65.6 million from a loss of 1.4 billion a year ago. Twitter spent USD 334 million buying back shares during the quarter.
Total costs and expenses (including cost of revenue and all operating expenses) grew 21 percent to USD 1.16 billion, driven by higher sales-related expenses, headcount growth, and infrastructure costs.
Twitter ended the quarter with a cash position at USD 8.61 billion, including the net proceeds from the March offering of USD 1.42 billion. The operating cash flow increased by USD 201 million in the year to USD 382 million while capex went to USD 276 million from 162 million. The free cash flow meanwhile climbed to USD 106 million from 39 million.
Looking ahead, Twitter expects headcount, along with total costs and expenses, to advance by 30 percent or more for the full year, with a focus on engineering and product. The company still expects total revenue to grow faster than expenses, assuming the global pandemic continues to improve and a continued modest impact from the rollout of changes associated with iOS 14.5.
For the year, expenses related to share-based compensation should reach USD 600 million, with capex at USD 900-950 million.
For the third quarter, the company is guiding for revenues at USD 1.22-1.3 billion and an operating result going from a loss of USD 50 million to break-even.
