This week we get a read on the social media space, with companies like Twitter, Facebook, Yelp and linkedin all reporting second quarter results.
Tonight Twitter and Yelp are up, the two less-favored of the four social media companies reporting this week. Estimize is looking for Twitter to post EPS of $0.06 on Tuesday, a penny higher than Wall Street, signifying 200% growth year-over-year. Revenue expectations are for $490M, slightly higher than the Street's $487M and company guidance of $477.5M.
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More important than the fundamentals are those closely watched user engagement numbers in the form of average monthly active users (MAUs) and daily active users (DAUs). Twitter disappointed investors in the latest quarter, posting average MAUs of 302M, an 18% increase, prolonging the fear that the company is not growing fast enough. For comparisons sake, Facebook, a much larger company, recorded MAUs of 1.4B last quarter, up 13%. One issue the micro-blogging site is trying to solve is the fact that users find it too difficult to use. Twitter hopes recently introduced features such as “while you were away,” Instant Timelines and group Direct Messaging will help to alleviate this problem.
The company has been progressing nicely in regards to mobile, despite being about a year and a half behind Facebook mobile efforts. Average mobile MAUs represented approximately 80% of total MAUs. Twitter also debuted app install ads last quarter, and reported that 89% of ad revenues now come from mobile. As the world continues to race towards mobile adoption, investors will be looking for updates on Twitter's progress.
Twitter has also made an aggressive bet on video through applications like Vine and the recently acquired Periscope which allows users to stream live videos from their mobile phones. Other acquisitions during the second quarter include TenXer, a collaboration platform, TellApart, and advertising/sales solution and Whetlab, a machine learning startup. In addition to hearing about these and future acquisitions, the marketplace also want to hear about plans to hire a new CEO following the highly publicized departure of former-CEO Dick Costolo.
