Twitter Pops 4% After Reporting Better-Than-Expected Q2 Revenue And Profit Along With Anemic User Growth

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Twitter Monthly Active Users Crawl To 316M, Dorsey: “We Are Not Satisfied”

Update: Twitter shares fell to flat in after-hours trading, before rebounding mildly to a slimmer gain. Investors are still trying to figure out how to score the quarter, it seems. 

Twitter earned an adjusted $0.07 per share on revenue of $502 million in its second quarter, the firm reported today. Investors expected Twitter to earn a mere $0.04 adjusted per-share profit on the back of $481.28 million in revenue.

The social company reported that its monthly active user count has climbed to 316 million. In its sequentially preceding quarter, Twitter had 302 million monthly active users, a figure up from 288 million during its fourth quarter. Update 2: Your humble servant mixed around some numbers here. The company had a slimmer 304 million million monthly actives in the quarter, excluding SMS-based “Fast Followers.” I initially reported, as you can see, a SMS-included figure in comparison to past quarters without the SMS numbers. That made the growth look stronger than it actually was. Here’s the chart, and I apologize:

Screen Shot 2015-07-28 at 2.09.11 PM

During the period, Twitter reported that its percentage of users that are active on mobile was 80 percent. In the sequentially preceding quarter, that figure clocked in at the same figure, 80 percent.

The company, in a quote, said that it was “not satisfied with [its] growth in audience.”

Mobile is a key driver of revenue for Twitter, which noted in its current release that it derived a steep 88 percent of its advertising revenue from mobile sources. In dollar terms, that works out to around $398 million.

Following its financial beat, shares of Twitter are up around 5 percent in after-hours trading. The firm enjoyed a strong day during regular hours, rising roughly 5 percent throughout the day. The broader United States markets were up, albeit a lower amount.

Twitter ended its quarter with $3.6 billion in cash and equivalents.

Looking ahead, Twitter expects revenue between $545 and $560 million in its current quarter, generating a very adjusted EBITDA of between $110 and $115 million in the same three month period. Investors expect, at currently tally, $555.78 million in third-quarter revenue.

For Twitter, this quarter nearly feels like a reprise. Twitter is strong financially, beating on both its top and bottom lines. But at the same time, its slow user growth is a drag, and the precise same drag that it has been for some time. Shares of Twitter are already off of their highs after-hours.