Twitter’s stock rose 4% in after-hours trading following its reveal of stronger-than-anticipated second-quarter earnings.
The company reported total revenue of $1.19 billion, more than analysts’ projected $1.07 billion and a 74% year-over-year increase from Q2 2020. In its letter to stockholders, Twitter attributed its revenue to “better-than-expected performance across all major products and geographics.”
By far its biggest revenue driver–as usual–was advertising. Twitter saw a “broad increase in advertiser demand” throughout the quarter, it said, and as a result $1.05 billion of its revenue came straight from ad sales. That figure is an 87% YOY jump from the amount of revenue it earned on advertising in Q2 2020 (which, we must note, was the quarter where ad sales across the entire internet dipped thanks to the onset of COVID-19).
Twitter attributed some of this increased advertiser demand to its introduction of new ad products–particularly direct response ads, which call on consumers to take a specific action, like liking/sharing a tweet, spreading a hashtag, or filling out a survey.
The platform also credited product introductions and improvements for its Q2 growth in “monetizable” daily active users (mDAUs). It’s now up to 206 million mDAUs, a 7 million user gain from Q1 2021, and up 11% YOY from Q2 2020.
Products Twitter launched during the quarter include Twitter Blue, its first subscription service; Spaces, its Clubhouse copycat (with pay-to-listen events incoming); and Tip Jar, a monetization-for-creators feature that lets users tip one another.
Twitter also announced (but didn’t launch) Super Follows, a YouTube Channel Memberships/Twitch subscriptions-esque feature where people will be able to pay $4.99 per month for extra content from tweeters who have at least 10,000 followers.
It’s not yet clear what impact these features will have on Twitter’s revenue, but in a call with analysts, CFO Ned Segal said the company’s role is “facilitating” transactions so creators can profit from their content.
“If a creator is creating great content, and you see it in Super Follows, or it’s just a tweet and somebody puts money in their Tip Jar, or it’s long-form content that we include in a different price point for a subscription, without ads […] then we would make sure that part of the value that can be attributed to the creator where those dollars go to them and that we’re facilitating a transaction,” Segal said, per CNBC.
Twitter said it expects to earn between $1.22 billion and $1.3 billion in Q3.