Twitter Q2 Earnings Review: Another Weak Performance

Twitter Q2 Earnings Highlights

Twitter Q2 earnings made a lot of news among the investors globally amid Musk walking away from acquisition, spam accounts, advertisement revenue, and profitability targets. Twitter management disappointed the investors as it did not host an earnings conference call, leaving a lot of questions unanswered.

Here are the details of Twitter Q2 earrings :

Twitter reported its latest quarterly earnings on Friday (22nd July). The earnings disappointed the wall-street on major data points including revenue, user-growth as well as profitability. 

Twitter share price ended 1% higher on Friday. 

Key highlights of the Twitter Q2 earnings report:->

• Twitter’s total income in Q2 stood at $1.18 billion
• Twitter’s net losses in Q2 stood at $270 million
• Twitter’s average monetizable daily active usage (mDAU) in Q2 was 237.8 million
• Twitter’s costs and expenses in Q2 stood at $1.52 billion

All the major data points of income, profits, monetizable daily active usage, as well as costs, were below analyst estimates.

Check out more coverage on Twitter Stock : Elon Musk Twitter Deal on Hold: Is a Legal Battle on the Cards?

Let’s now deep-dive into the Twitter Q2 earnings :

Twitter Q2 Revenue: 

Twitter reported total revenue of $1.18 billion for the second quarter - a decline of 1% year on year. This reflects the ongoing tussle in the advertising industry with a lot of enterprises cutting advertising spending in anticipation of weak macroeconomic growth in the near future. 

The current quarter’s revenue is much lower than the 20% growth the company had predicted for the year.

• The core revenue segment - Advertising - grew 1% year-on-year to $1.08 billion
• Subscription and other revenue fell 27% year-over-year to $101 million

Twitter Q2 Profits: 

Twitter reported a net loss of $270 million compared to a profit of $66 million a year ago during the same period. This loss represents a net profit margin of -23% (negative 23%). This quarterly loss can be attributed to the spike in costs and expenses. 

Twitter Q2 Expenses: 

Twitter reported total costs and expenses of $1.52 billion for the second quarter of the year 2022 - a jump of 31% since the last 1-year. 

Analysts at Wall street believe that the ongoing tussle with Elon Musk for full control of Twitter concerns over spam accounts and the accuracy of reported daily active users must have certainly contributed to Twitter not becoming a preferred destination for advertisers.

Twitter Daily Active Users in Q2:

Twitter reported 237.8 million users as the average monetizable daily active usage (mDAU) for the Q2 of 2022. The mDAU jumped 16.6% since last year driven mostly by product improvements as well as the slightly better conversion of international users.

Twitter’s international average monetizable daily active usage (mDAU)  remained 4.7x of its US average monetizable daily active usage - indicating it is a major focus area for future growth. The international average monetizable daily active usage stood at 196.3 million - an increment of 17% from last year's same period whereas its US average monetizable daily active usage stood at 41.5 million - a 15% jump from last year.

Twitter Q2 Earnings: Guidance

Twitter did not issue any growth or business guidance for the upcoming quarter due to the ongoing court proceeding with Elon Musk over him walking away from an acquisition deal.

Twitter Q2 Earnings: Analyst review

Most analysts did not comment on the numbers since the analyst call did not happen. In the recent past, many analysts including Truist Securities, Rosenblatt, Piper Sandler, as well as Citigroup, and Baird have maintained either neutral or buy calls however cut the target share price by 8% to 20%.

Twitter Share Price Movement in the chart

Check the latest Twitter share price here.

Based on 42 Wall street analysts offering stock ratings for Twitter, currently, 4% are recommending Buy, 83% are recommending hold and the remaining 13% are recommending a ‘Sell’ on the Twitter stock.