Twitter (TWTR) Stock: Surging On Quarterly Report

Twitter Inc (NYSE: TWTR) is having an incredibly strong start to the trading session this morning, and for good reason. The company announced its results for the first quarter, blowing away expectations and leading to excitement among investors. Today, we’ll talk about:

  • The quarterly report;
  • what we’re seeing from TWTR stock as a result; and
  • what we’ll be watching for ahead.

TWTR Stock Gains On Quarterly Results

As mentioned above, Twitter is having a great day in the market today after announcing its results for the first quarter. The announcement came by way of press release early this morning.

In the release, TWTR said that it produced net income of $191 million for the quarter. That works out to $0.25 per share. This figure showed incredible year over year growth from $61 million or $0.08 per share.

The company said that adjusted earnings per share came in at $0.37, up from $0.16 last year. Analysts expected that the company would generate earnings in the amount of $0.15 per share.

Revenue also proved to be a hit, coming in at $787 million for the first quarter. In the same quarter one year ago, the company generated $665 million in revenue. Also, analysts epected that the company would generate $774 million in revenue.

The growth was largely driven by strong growth in monthly active users. In fact, during the quarter, MAUs grew by 9 million, beating analyst expectations of a decline of 4 million. In terms of monetizable daily active users, the figure grew to 143 million during the first quarter after gaining 8 million.

In the second quarter, the company said that it expects to generate revenue between $770 million and $830 million. Analysts are currently calling for $818 million in revenue during the current quarter.

In a statement, Jack Dorsey, CEO at TWTR, had the following to offer:

We are taking a more proactive approach to reducing abuse and its effects on Twitter. We are reducing the burden on victims and, where possible, taking action before abuse is reported. For example, we are now removing 2.5x more Tweets that share personal information and ~38% of abusive Tweets that are taken down every week are being proactively detected by machine learning models. We’re also continuing our work to make Twitter more conversational via the launch of our public prototype app (twttr), with the end goal of making conversation on Twitter feel faster, more fluid, and more fun.

The above statement was followed up by Ned Segal, CFO at TWTR. Here’s what he had to say:

We’re delivering strong results with ad revenue up 18% year-over-year, demonstrating Twitter’s unique value proposition for advertisers as the best place to launch something new or connect with what’s happening. We’ve never been more confident in our strategy and execution and see a great opportunity to grow our audience and deliver even more value for advertisers.

What We’re Seeing From The Stock

One of the first lessons that we learn when we start to work in the market is that the news leads to moves. When it comes to Twitter, the news that was released this morning proved to be overwhelmingly positive.

After all, the company beat all metrics during the first quarter, and beat expectations are exactly what investors want to see. So, it’s not surprising that excited investors are pushing the stock up in the market this morning.

As is just about always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:18), TWTR is trading at $36.76 per share after a gain of $2.37 per share or 6.89% thus far today.

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What We’ll Be Watching For Ahead

Moving forward, the CNA Finance team will continue to keep a close eye on TWTR. In particular, we’re interested in following the story surrounding the company’s continued growth in monetizable daily active users as this seems to be the fuel behind the strong growth that we’re seeing in the stock. Nonetheless, we’ll keep a close eye on the news and bring it to you as it breaks!

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