Twitter (TWTR 16.27, +1.61) has surged 11.0% in pre-market after reporting its largest bottom-line beat since shares went public at the end of 2013.
The social media platform reported above-consensus first quarter earnings of $0.11 per share on a 7.8% year-over-year decline in revenue to $548 million, which was also ahead of market expectations.
Twitter has always enjoyed strong engagement from its user base, but extracting revenue from its business model has been a challenge that has plagued the company since the early days, resulting in a steady slide from its post-IPO high ($74.73) to a low just beneath the $15.00 area. The stock has spent more than a year trading near its low, but today's report has reinvigorated the bulls.
First quarter average monthly active users totaled 328 million, which was ahead of market expectations. Average monthly active user count increased 2.8% sequentially and 6.0% year-over-year. Twitter is the preferred communication medium of President Donald Trump, a factor that may have played a part in Twitter's recent user growth.
Daily average users increased 14.0% year-over-year after growing 11.0% in the fourth quarter of 2016. Adjusted EBITDA for the first quarter decreased 6.0% year-over-year to $170 million.
Advertising revenue declined 11.0% year-over-year to $474 million. This was fueled by a 13.0% year-over-year decline in U.S. revenue to $341 million while International revenue grew 2.0% year-over-year to $208 million. Ad engagements grew 139.0% year-over-year while cost per engagement declined 63.0% year-over-year.
Data licensing and other revenue grew 17.0% year-over-year to $74 million.
Looking ahead, the company expects that second quarter adjusted EBITDA will be between $95 million and $115 million.