On Thursday, July 22, Twitter shares jumped 5.00%. It announced its 2021 second-quarter revenue earnings and should have another increase in the third quarter.
The company climbed 0.10%, with a net gain of $0.07. This sent the stocks higher at $69.57 per share.
It should open Friday’s session with an increase of 5.56% to $3.93 per share.
According to its press release, the social media giant had total revenue of $1.19 billion, which is a huge increase of 74.00% from the same quarter last year.
It added that most of its revenue came from advertisements, with $1.5 billion. This leap in ad revenue was due to its 32.00% increase year over year in ad engagement and a 42.00% rise in cost per engagement.
This resulted in Twitter’s increase in revenue, where the earnings were 20 cents per share compared to the 7 cents predicted by analysts.
In this year’s second quarter, the company introduced its first subscription service. Users are allowed to access the Undo Tweet button and its other exclusive features.
Furthermore, it also presented new areas like Spaces and Tipjar. Spaces is an audio-only chat room that an account can use with at least 600 followers. Tipjar is a feature that authorizes its users to send money to other people on the platform.
Moreover, Twitter made an effort to improve the effectiveness of its ads as it introduced 2,500 new topic categories during the quarter. This was to help users to find the content that they are interested in.
Revenue Growth Expectation in Q3
Additionally, the social media giant is expecting that its Q3 revenue will grow even higher.
It is estimated that its revenue for the third quarter will reach $1.22 billion to $1.30 billion.
However, analysts estimated that it would only be around $1.17 billion.
The earnings report caused Twitter’s stock to rally, making it one of the best performing technology stocks year to date.
Now, the company expects its headcount and total, total costs, and expenses to jump at least 30.00% for the whole year.
This increases from its previous guidance of 25.00% as it invests in its product and engineering teams.
Twitter CEO Jack Dorsey stated that digital currency is a huge part of the company’s future. It could be used for eCommerce transactions on the platforms or to tip famous content creators.