Twitter records a US$65.6 million profit in Q2 2021 results

Twitter today announced financial results for its second quarter of 2021.

Q2 was a strong quarter for Twitter with total revenue of US$1.19 billion (A$1.61 billion), up 74% year- -on-year, reflecting better-than-expected performance across all major products and geographies on the  $1.07 billion (A$1.45 billion) predicted by analysts polled by Refinitiv.

After a US$1.38 billion (A$1.87 billion) loss in the corresponding 2020 quarter, Twitter showed a US$65.6 million profit (A$88.9 million) in second quarter’s results.

Twitter’s revenue performance also drove better-than-expected profitability and grew 74% year-on-year in the quarter, with generally accepted accounting principles (GAAP) operating income of $30 million (A$40.7 million) and GAAP operating margin of 3%.

The company cited: “We continued to improve our brand and direct response ad products with updated formats, measurement, and prediction. Revenue product improvements, strong sales execution, and a broad increase in advertiser demand contributed to 87% year-over-year growth in ad revenue in Q2.”

Advertising revenue totalled US$1.05 billion (A$1.42 billion), an increase of 87% year-on-year, or 85% on a constant currency basis.

Total ad engagements increased by 32% year-on-year, with the cost per engagement (CPE) increased 42% year-on-year.

Source: Twitter Financial results [click to enlarge]

Twitter and Square CEO Jack Dorsey, said: “As we enter the second half of 2021, we are shipping more, learning faster, and hiring remarkable talent. For example, our increased shipping cadence contributed to reaching 206 million average monetisable DAU in Q2, up 11% year-over-year and 3% quarter-over-quarter. There’s a tremendous opportunity to get the whole world to use Twitter.”

Twitter CFO, Ned Segal, said: “We delivered better-than-expected performance across all major products and geographies while growing our audience.

“We continued to make significant progress on our direct response and brand products with updated ad formats, improved measurement, and better prediction. We are driving more value for advertisers with our strong push into performance-based advertising and expanded offerings for small and medium-sized businesses.”

In the outlook ahead, Twitter said it’s confident in its strategy as it enters the second half of the year, and are updating its outlook for expense growth and revenue.

“We now expect headcount, along with total costs and expenses, to grow 30% or more for the full year of 2021 with a focus on engineering and product. As you’d expect, incremental headcount investments in 2021 will flow into our annual expense base in 2022.

“We continue to expect total revenue to grow faster than expenses in 2021 — assuming the global pandemic continues to improve and that we continue to see modest impact from the rollout of changes associated with iOS 14.5. How much faster will depend on various factors, including our execution on our direct response roadmap and macroeconomic factors.”

In Q3, Twitter expects to see total revenue to be between $1.22 billion (A$1.65 billion) and $1.3 billion (A$1.76 billion) GAAP operating income is expected to be between a loss of $50 million (A$67.8 million) and break even.


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