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Twitter Earnings: User Growth Accelerates

By Daniel Sparks - Jul 26, 2019 at 2:21PM

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Here's what's behind the social network's strong double-digit revenue growth in the second quarter.

Twitter ( TWTR -1.36% ) announced second-quarter results early Friday morning. The quarterly update highlighted more strong momentum for the social network, including revenue and operating income that were both above management's guidance ranges.

Here's what investors should know.

A woman browsing on a smartphone

Image source: Getty Images.

Twitter's second-quarter results: The raw numbers


Q2 2019

Q2 2018



$841 million

$711 million


Operating income

$76 million

$80 million


Monetizable daily active users

139 million

122 million


Data source: Twitter's second-quarter shareholder letter.

What happened with Twitter this quarter?

Twitter's second-quarter revenue rose 18% year over year to $841 million. The company's top-line growth was even more impressive when adjusted to exclude the impact of currency fluctuations. Constant currency revenue rose 20% year over year -- in line with constant currency revenue growth in the first quarter of 2019. Management had guided for revenue during the period to be between $770 million and $830 million.

Top-line growth was driven by strength in the U.S., where revenue grew 24% year over year. International revenue increased 12% year over year, or 16% in constant currency.

Twitter's total advertising revenue was $727 million, growing 21% year over year. Data licensing revenue rose 4% year over year to $114 million.

Operating expenses grew faster than revenue, rising 21%. This weighed on profitability, and non-GAAP (adjusted) earnings per share came in at $0.05, down from $0.08 in the year-ago period.

What management had to say

In the second-quarter earnings release, Twitter CEO Jack Dorsey pointed out the company's achievements in improving the health of its platform, noting that its efforts to detect and deal with malicious behavior on the platform drove "an 18% drop in reports of spammy or suspicious behavior across all Tweet detail pages, which show the replies to any given Tweet on our service."

In addition, Dorsey noted that improved algorithms for serving relevant content to users helped drive daily active usage on its platform higher. The company's monetizable daily active users rose 14% year over year -- an acceleration from 11% growth in Q1.

Looking ahead

In the third quarter, management expects revenue to be between $815 million and $875 million. The midpoint of this guidance range would mark 11% revenue growth. The expected deceleration is due to several factors, management explained in the second-quarter shareholder letter:

First is the comparison we face as we lap our global business recovery in the second half of last year. Second are the recent decisions we have made to deprecate certain legacy ad formats in order to better serve our customers and drive greater focus in revenue product.

Management guided for operating income of $45 million to $80 million during the period. This compares to operating income of $92 million in the third quarter of 2018.

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