Twitter shares zoom 35 per cent and it's NOT all the World Cup, says Costolo

By Noel Young | Correspondent




July 30, 2014 | 4 min read

Twitter shares went up like a rocket yesterday as the company reported sales of more than $300 million in the second quarter

The World Cup was a key element - but not the only factor - as Twitter stock finished more than 35 percent higher at the end of the day.

CEO Dick Costolo, who has been making a lot of changes at the social network, said,"We had a strong quarter and made progress on multiple fronts. Our financial performance was truly exceptional."

Costolo: Delighted

The San Francisco company has struggled to maintain growth rates it had before its 2013 initial public offering.

However, Twitter added 16 million users in the second quarter for a total of 271 million people accessing the service at least once a month, the biggest gain in more than a year. Shares jumped to more than $50 in late trading.

The World Cup led to record usage of Twitter's microblogging service in the second quarter, with the company reporting 672 million tweets related to the event . A peak during the final game reached 618,725 tweets per minute.

Costolo said, "During the World Cup, we delivered the kind of events experience I've wanted to see from us for some time. These experiences felt alive, they felt wonderfully complementary to the matches themselves."

He said he wanted the effort to be “a template for future live events.”

Twitter's advertising revenues also boomed. The company reported a second-quarter loss of $144.6 million, or 24 cents a share, on sales of $312.2 million; after stock-based compensation for employees, the company said it made a profit of $14.6 million, or 2 cents a share.

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Analysts had expected Twitter to report a loss of a penny a share after adjustments on revenues of $283.1 million, according to Thomson Reuters .

Twitter's revenue total was more than double its performance from the same period a year ago, at least the 10th consecutive quarter that it has increased sales by more than 100 percent.

Costolo insisted it wasn't all the World Cup, said the San Jose Mercury News, crediting product changes meant to ease understanding of the platform for new users to avoid the perception that the growth was temporary.

"It's been the product changes over the year that have driven user growth," he said

Costolo's new CFO -- former Goldman Sachs executive Anthony Noto, who helped lead the company through its IPO -- made his debut in the day’s conference call and predicted an explosive future for Twitter.

"I came here with one belief, that we can build the largest audience in the world," Noto said.



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