Social media giant Twitter (TWTR) - Get Report on Thursday announced a wider-than-expected loss for its second quarter as a plunge in advertising revenue related to the coronavirus pandemic and recent social unrest failed to offset a surge in users and traffic.
The San Francisco-based company posted a loss of $1.23 billion, or $1.56 a share, vs. income of $1.12 billion, or $1.43 a share, in the same period a year ago.
The adjusted loss in the quarter was 16 cents a share - analysts polled by FactSet had been expecting a breakeven per-share result for the quarter.
Revenue came in at $683.4 million, down from $841.4 million the same period last year and below analysts’ forecasts of $701.6 million.
At the same time, Twitter said its daily users surged to 186 million in the second quarter, up 34% from a year ago and the second straight quarter of gains on its platform and its largest year-over-year increase since first reporting the metric in 2016.
The growth was “primarily driven by external factors, such as continued shelter-in-place requirements for many people, and increased global conversation around the Covid-19 pandemic and other current events,” the company said in a statement.
However, advertising revenue took a big hit, not only from the economic fallout from the pandemic but also due to brands slowing or pausing spend “in reaction to U.S civil unrest,” the company said.
Twitter said it was exploring additional business lines, including a possible subscription offering, as a way to supplement advertising, which makes up more than 82% of total revenue.
Meantime, the company also acknowledged the high-profile hack of its service earlier this month, calling the incident “disappointing” and saying it was “working with law enforcement as they conduct their investigations.”
“We understand our responsibilities and are committed to earning the trust of all of our stakeholders with our every action, including how we address this security issue,” Twitter CEO Jack Dorsey said in the statement.
Hackers used phishing techniques against company employees to gain access to at least 130 accounts, including for some famous users such as Joe Biden, Jeff Bezos and Elon Musk, and sent tweets asking for Bitcoin.
Shares of Twitter were up 5.05% at $38.81 in trading on Thursday.