Twitter’s ad revenue grew last quarter, but the company’s still working to get its mojo back.
The microblogging platform’s advertising revenues increased 18 percent to $535 million in the second quarter, with mobile ads making up 89 percent of its total ad revenues. Net revenues rose 20 percent to $602 million, but the company still posted net losses of $107.2 million, or 15 cents a share, which nonetheless was an improvement from year-ago losses of $136.7 million, or 21 cents.
Adjusted earnings of 13 cents a share came in 3 cents ahead of the 10 cents analysts projected.
Looking ahead, Twitter projected sales of $590 million to $610 million of the third quarter, well shy of the $678 million Wall Street had penciled in.
Chief operating officer Adam Bain said he saw two opportunities to “accelerate” the advertising business and Twitter had become a “video-centric” platform. Bain said that online video was the number-one format in terms of ad revenue on Twitter and promoted tweet advertisers had been upgrading to video. He added that he saw opportunities in direct-response advertising improvements and better creative targeting for advertisers.
Aside from advertising, chief executive officer Jack Dorsey discussed the ongoing attempts to add users.
“We’ve made a lot of progress on our priorities this quarter,” he said. “We are confident in our product roadmap, and we are seeing the direct benefit of our recent product changes in increased engagement and usage.”
The changes in the past year include Moments, to help users find the most important news items; a change in the timeline that shows the most important updates first; changes to character count limits and reply rules, and a stand-alone app called Engage for high-profile users.
Dorsey added, “We remain focused on improving our service to make it fast, simple and easy to use, like the ability to watch live-streaming video events unfold and the commentary around them.” He also said that continuing to grow involves educating people about why to use Twitter.
Earlier this week, the company said it would stream live sporting events on Twitter and has been streaming the national political conventions. It also introduced an in-house ad campaign that is a nod to the disconnect between avid Twitter users — there are about 320 active monthly users — and those who don’t understand why or how to use the service.
“This quarter, we saw year-over-year and sequential growth in both monthly active and daily active usage,” said chief financial officer Anthony Noto. “We continue to believe that, with disciplined execution against our priorities, we can drive sustained engagement and audience growth over time.”
“What makes our audience growth this quarter notable is we can see directly the link between product changes we made and our growth,” Dorsey said. “We’re working every day to make Twitter faster, more intuitive, and easier to use. There’s more changes like these on the way.”