Twitter Inc NYSE: TWTR shares are up 8.80% in pre-market trade on Wednesday following the company’s strong quarterly performance. The social network’s earnings per share outperformed analyst expectations of $0.01 EPS, with the company posting an EPS of $0.11.
The strong quarter saw the company’s revenue rise to $548 million, beating expectations of $511.9 million. The company’s revenue growth is not aligned with the company’s user growth due to advertisement deals from six months prior.
The company’s monthly active users also rose to 328 million users, beating expectations of 321 million active users.
Twitter has failed to disclose its daily active user numbers. CEO Jack Dorsey states that the company’s growing user base is due to a simplified search and new measures put in place to halt abuse on the platform. The company’s new machine learning platform allows users to see tweets that are more relevant to the user.
Twitter Inc NYSE: TWTR Working on Improving User Experience
The company has been working on increasing its platform’s ease-of-use, with the company making it easier to reply to tweets.
Dorsey warned that the company’s Q2 outlook is worse than expected, with the company expecting their EBITDA to miss analysts projections of $141 million. The company puts the figure at $95 million – $115 million.
The lower-than-expected forecasts are due to the company’s transition, where Twitter is phasing out less effective ad formats. The company notes that current revenue derives from ad deals from 6 – 12 months prior.
Twitter Inc NYSE: TWTR shrugged off the loss of its deal with the National Football League. The social media giant states that the deal helped push Twitter’s video platform into the spotlight. The company has over 800 hours of video on their platform, not accounting for NFL games. The company streamed the Grammy’s red carpet with great results, as 5 million viewers watched on.
Advertising revenue fell 11% on the quarter to $474 million, still beating analyst expectations of $442.7 million in advertising revenue.