Twitter Inc stock (NYSE: TWTR) lost over 10.5% in the pre-market session on July 27th, 2017 (as of 8:49AM EDT; Source: Google finance). The group’s second quarter revenue lost 5% to $574 million, as compared to the same period last year. Advertising revenue fell 8% yoy to $489 million during the second quarter of 2017 while US revenue lost 7% yoy to $335 million. International revenue fell 1% yoy to $239 million during the second quarter of 2017. On the other side, Data licensing and other revenue surged 26% yoy to $85 million during the period while the group expects this momentum to continue. Total ad engagements enhanced 95% yoy while Cost per engagement (CPE) lost 53% yoy.
Product contributions to Twitter’s engagement and the audience remained during the second quarter of 2017 leading to double-digit percentage rise for DAU in five of their top 10 global markets. As a result, Total DAU rose 12% yoy while MAU enhanced 5% yoy in the second quarter of 2017 on the back of better relevance in email, push notifications, and the timeline, along with ongoing efforts in marketing. This product improvements offset seasonal impact leading to flat MAU quarter-over-quarter.
Video segment has been rapidly growing ad format for Twitter in the second quarter of 2017 which offset traditional Promoted Tweet and direct response ad formats pressure. Ongoing mix shift toward video ad impressions and better click through rates enhanced targeting and ad relevance across all ad formats on a like-for-like basis. Total yield per impression enhanced on a year-over-year basis on the back of a mix shift toward better yield ad formats coupled with the higher click-through rates across most ad formats.
Going forward, Twitter’s Adjusted EBITDA for the third quarter of 2017 is forecasted to be in the range of $130 million and $150 million, while Adjusted EBITDA margin is expected to be in the range of 25% and 26%. For the full year of 2017, Twitter forecasts non-GAAP expenses fall in the range of 3% to 6% yoy while Capital expenditures would be in the range of $300 million and $400 million.
The Twitter stock rallied over 24% in the last three months (As of July 26th, 2017; Source: Google finance). On the other hand, as per tipranks.com, consensus target price of analysts is $16.17, which is a 17.5% downside from the current levels.