Twitter has lost an eye watering $14bn in value this year, but share prices soared on Tuesday after the company’s results surpassed analysts’ expectations.
Shares rose by an unprecedented 34% in afterhours trading yesterday as the company announced that active users of the social media site had increased by 6.3% since the last quarter, and increased by 24% since last year to 271 million.
However, the company reported a loss of $145m (£86m), more than triple the loss it reported at the same time last year.
Share value had dropped by almost 40% over the year, dipping below the level at the company’s IPO at the end of 2013.
Twitter’s market cap stood at $24.5bn on its first trading day in November 2013, and rose to $40bn at the end of December. The stock subsequently plummeted in February 2014.
But the latest results saw investors push the company’s value up by more than £7bn, as advertising revenue also boosted results. Revenue for the three months to June hit $312m, higher than the expected $283m, and up 124% since last year.
Twitter chief executive Dick Costolo said: “We had a very strong first quarter. Revenue growth accelerated on a year over year basis fueled by increased engagement and user growth.
“We also continue to rapidly increase our reach and scale.”
Costolo also said that the company’s next big revenue opportunity is to monetise visitors to the site that are not already logged-in and make their way to the site through other websites.
“We feel like we provide limited content to those hundreds of millions of other users who are unique visitors to our properties and we see a big opportunity to serve them just as well as the other two audiences,” he said.
Javier Burón, founder and CEO of Twitter analytics firm SocialBro said: “The sustained growth in advertising revenues reflects Twitter’s transformation into a mature, mainstream marketing platform with global reach. It is now a vital part of any marketing campaign, rather than a ‘nice to have’.
“In the past year Twitter has introduced a whole host of features to attract advertisers and help them to reach more followers. The fact that messages can spread virally is a massive incentive to brands but so are Twitter’s targeting and reporting capabilities, which remove the guesswork and mark it out from traditional channels such as broadcast.”