Twitter reported its strongest-ever user growth as people took to the social network to chatter about the coronavirus, but its ad sales suffered.
Shares of the San Francisco-based company spiked as much as 6 percent in early morning trading after Twitter said that monetizable daily active users (mDAU) increased 36 percent year-over-year to 186 million, blowing past analyst expectations of 176 million.
Twitter said shelter-in-place orders helped drive the growth as people used their timelines to get news about the virus.
But the virus also hurt Twitter as its ad sales — which make up more than 80 percent of its revenue — dropped 23 percent, missing Wall Street’s expectations.
Chief Executive Jack Dorsey, meanwhile, apologized for last week’s major hack of prominent accounts — including those of Barack Obama, Bill Gates, Elon Musk and Kim Kardashian — calling it a “very public and disappointing security issue.”
He said Twitter has taken steps to improve its security and “resiliency against targeted social engineering attempts.”
Shares of Twitter were up 2.8 percent Wednesday morning, at $37.98.
Overall revenue was down 19 percent year-over-year, and saw a boost from steadier sales growth from the licensing of users’ posts to researchers and marketers.
The company said it finished rebuilding its ad-management technology in the second quarter, which would support faster development of new formats going forward, and was rolling out measurement tools for “direct response” ads used by app developers.
Twitter reported a second-quarter loss of $1.2 billion, largely driven by the reversal of a tax benefit established last year, when the company transferred intellectual property to Ireland. Because of the second quarter’s steep coronavirus-related losses, Twitter did not make enough money to take advantage of the tax benefit.
It also said it was exploring “subscriptions and other approaches to complement our advertising business,” although it was not expecting any revenue to result this year.
With Post wires.
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