User Growth Help Twitter Shares Surge, Earnings Exceed Estimates

Twitter is finally showing signs of attracting new users, which was its biggest challenge till now. This user growth has helped the shares of the company to jump by 8.3-percent to $15.83 on Wednesday at 9.31 a.m. EST. Before this, in premarket trading, it soared by almost 14-percent on Q1 earnings and user growth that exceeded the estimates of analysts. However, Twitter also reported its Q1 revenue loss.

The first quarter (that ended on March 30) revenue was $548 million, which indicated a fall of 8-percent from the 595 million dollars revenue that was generated a year ago during the same period. However, it beat the estimates of analysts, which was 512 million dollars. The revenue growth of Twitter for the same period last year was 36-percent.

The revenue decline of Twitter this year is mainly due to its poor US ad business, which declined 13-percent year-over-year. On the contrary, the international revenue surged by 2-percent year-over-year.

After the firm went public in the year 2013, it has been struggling with the outlook that it’s a fading platform. However, Twitter displayed indications of new life in the Q1, reporting that monthly active users on an average increased 6% from previous year to 328 million. The daily users have been increasing at a much quicker pace every quarter for the last year, said Twitter, even gaining this year from “new and resurrected users following more news and political accounts,” particularly in the U.S.

Jack Dorsey, the Chief Executive Officer managed to challenge the expectations of investors by revamping the growth of users. At present, he has to follow the same for revenue following the report by Twitter that it had experienced loss after going public in the year 2013. The firm is planning to make use of its first momentum for convincing the marketers to invest more in advertisements.

In a conference call with investors and analysts, the CFO and COO of Twitter Anthony Noto said the user growth for this quarter can credited to new and revived users after “news and political accounts in the U.S.,” indicating that the site may be gaining more interest following the presidency of Donald Trump.

Dorsey said that the firm experienced a growth in daily active users consecutively for the fourth quarter, an increase of 14-percent year-over-year. Though, the firm denied sharing the actual figures. He is hoping that the growth of users will enhance monetization in future.

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