What To Expect From Twitter’s Q2 Results

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Twitter (NYSE:TWTR) is scheduled to report its Q2 2016 earnings on Tuesday, July 26. Twitter’s struggle to grow its active user base was the primary investor concern through 2015 and Q1 2016, and that is unlikely to change this time around. In the first quarter this year, Twitter’s average Monthly Active Users (excluding SMS Fast Followers) improved by 5 million quarter-over-quarter to 310 million. We believe that the user base is likely to have marginally improved since then. In Q2, Twitter expects revenues to grow by around 20% over the prior year quarter and adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) to grow by 20-29% over Q2 2015. twtr-55

In Q1 2016, Twitter’s revenues rose by 36% y-o-y to $595 million. Advertising revenue increased by 37% y-o-y to about $531 million. This was primarily driven by a 208% y-o-y increase in the number of ad engagements due to growth in auto-play video ads. Going forward, we believe growth in overall ad engagement will continue to drive the company’s advertising business, as there is still significant potential to increase ad load levels on the micro-blogging platform, especially through videos.

Have more questions about Twitter? Please refer to our complete analysis for Twitter

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