Twitter Inc.’s second-quarter revenue and user growth topped analysts’ estimates, sending its shares soaring more than 35 percent.
The microblogging company’s active membership in the quarter reached 271 million, with year-over-year growth at 24 percent, compared with 25 percent in the prior period, Twitter said in a statement Tuesday. That exceeded analysts’ projections of 267 million monthly active users for the quarter, according to data compiled by Bloomberg. Sales more than doubled to $312.2 million, exceeding the $282.8 million average estimate.
The San Francisco-based company is maintaining its rate of attracting new members after reporting two straight quarters of decelerating user growth. The slowdown, coming so soon after Twitter’s November initial public offering, had stoked investor concerns that the company’s fastest sales growth was behind it. Chief Executive Officer Dick Costolo responded by gutting Twitter’s executive ranks, including replacing his chief financial officer and parting ways with his operating chief.
“People who were negative on the company and on the stock now have reason to reconsider and re-evaluate,” said Scott Kessler, an analyst at S&P Capital IQ. “Twitter has momentum in its business.”
Shares jumped as high as $52.48 in extended trading after rising 1.8 percent to $38.60 at the close. The stock, which closed at a record of $73.31 Dec. 26, had plunged 47 percent since then on concerns that Twitter wasn’t growing fast enough to justify its valuation. The company is among the most expensive in technology based on projected 2014 sales.
Twitter’s net loss widened to $144.6 million, or 24 cents a share in the second quarter, from $42 million a year earlier. Excluding some items, the company reported a 2 cent profit, compared with the 1 cent loss estimated by analysts polled by Bloomberg.
People viewed their Twitter timelines more often, with 173 billion views, up from 157 billion in the prior quarter.