Twitter Inc. (TWTR, Financial), a major David Einhorn (Trades, Portfolio) holding, said in its second-quarter shareholder letter that revenues increased 24%, driven by ongoing improvements to the service and improved advertiser return on investment.
The San Francisco-based social media company reported net income of $100 million for the quarter, compared to a net loss of $116 million in the prior-year quarter.
Company accelerates daily active user growthÂ
CEO Jack Dorsey mentioned that Twitter celebrated its third consecutive quarter of profitability: for the quarter, the company reported a 14% net profit margin and 13 cents in earnings per diluted share.
Dorsey said daily active users increased 11% year over year as the company facilitates the sharing of ideas around breaking news and events, including the NBA Finals and the World Cup. He mentioned that the company’s collaboration with Twenty-First Century Fox Inc. (FOXA, Financial) to show every World Cup highlight in the U.S. underscores how partnerships allow Twitter to “contribute to the conversation” on the platform.
Stock tumbles on weak monthly active user outlook for the upcoming quarter
Although the company reported strong daily active user growth during the past two quarters, Dorsey warned that monthly active users could decline by several million as it focuses on improving platform health. Twitter reported 335 million monthly active users for the quarter, down 1 million from the prior quarter.
Shares of Twitter traded over 19% lower Friday morning on the lower monthly active user outlook for the upcoming quarter. Rival social media company Facebook Inc. (FB, Financial) tumbled 19% on Thursday following weak revenue and monthly active user outlook for the remainder of the year.
Disclosure: No positions.
