NEW YORK (Reuters) – Twitter Inc (TWTR.N) will have a chance to detail its plans to grow users and ad dollars on Friday when it releases its second-quarter earnings before the market opens.
Investors will have their eyes on Twitter’s monetizable daily active users (mDAUs), its revenues, ad growth and products, live-steam partnerships and updates to its prototype app Twttr.
Below is a closer look at each in turn:
DAILY ACTIVE USERS
Twitter reported 134 million average mDAUs in its first quarter, an 11% year-over-year increase. Analysts at Cowen expect a 28-million rise in mDAUs in the second quarter, a 1% increase.
Twitter began reporting mDAUs, a metric that tracks the number of daily users logging on to the platform, instead of monthly active users in the first quarter of this year. The new metric is supposed to help investors and advertisers better understand engagement on Twitter.
Twitter’s introduction of mDAUs drew skepticism; however, some analysts think mDAUs paint a better picture of engagement. Investors need to keep an eye on Twitter’s mDAU growth and how long people are using the app.
Ads make up a bulk of Twitter’s revenue while data licensing are its other major revenue source. Twitter’s first quarter saw revenue rise 18% year-over-year.
Twitter’s revenues are slated for a slight 1% rise in its second quarter, from $778 million to $832 million, according to Refinitiv’s Eikon. Investors should watch out for Twitter’s second-quarter ad revenue growth as the company plans to launch more ad products.
Twitter said last quarter that it planned to improve its ad formats and promotion products on its mobile app, a move that could make more advertisers happy.
“They’re getting more attuned with their users’ preferences,” said analyst Michael Pachter at Wedbush Securities. “They’re making ads more likely to be seen.”
Twitter CEO Jack Dorsey said the company tailors live content to users based on whom they follow.
Investors should watch out for new ad products and how they mesh with advertisers’ needs, which could be a catalyst in Twitter’s growth.
Twitter’s live-video deals with NBCUniversal (CMCSA.O) and the National Basketball Association point to the company’s efforts to be a conversation hub as it focuses on elevating content that gets people to tweet.
Twitter wants to make following events and interests as easy as following an account. Bigger and better partnerships for the live-streams could catch advertisers’ attention.
Some experts are not convinced that the live-streams will have a major impact on daily users or ads as the content is generally available on television and other platforms.
Investors need to look for other major brands partnering with Twitter and the amount of engagement live-streams are able to pull in.
THE PROTOTYPE APP
Wall Street is wondering about Twitter’s next steps for its prototype app “Twttr.” The company launched the app in March to give users a place to test out features and designs. The invite-only platform is, at times, a peephole into Twitter’s upcoming tools and an additional avenue for advertisers.
Reporting by Arriana McLymore in New York; Editing by Nick Zieminski