Twitter stock price spikes on news of earnings boost from user growth and ad demand

• Twitter shares soared 16 percent Tuesday after the company said first-quarter earnings rose on strong user growth and ad demand. 
• The number of daily users of Twitter rose 11 percent, to 134 million, in the first quarter. 
• Twitter stock is up about 40 percent since it started the year at nearly $29 a share. 
• The company said it is experimenting with a new feature it says will make the app more conversational, allowing users to view an entire Twitter thread instead of tapping through each individual post. 
  

Twitter Inc. on Tuesday said its earnings grew during the first three months of the year on strong demand for ads and healthy growth in its daily users count.

The company said the number of daily users rose 11 percent, to 134 million, for the first quarter, thanks to both "organic growth as well as ongoing product improvements and marketing."

The San Francisco-based company started disclosing its daily user base in the previous quarter. These are users who log into the site at least once a day and see advertisements on the platform. Twitter says the daily metric will replace its monthly user count, which it will stop disclosing.

Twitter stocks price soared 16 percent Tuesday morning to around $40 a share. The stock is up about 40% since it started the year at nearly $29 a share.

New app changes

Tuesday's earnings report also included details of an experimental app that the company has been developing to make the social media site more "conversational." The app's biggest change is that it lets users view an entire Twitter thread instead of having to tap through each individual post.

"People love this," said CEO Jack Dorsey, on an earnings call. "They love this more than the production Twitter app."

Twitter executives said a small group of people started trying the app out a month ago but did not reveal when it would be launched.

The company posted profit of $190.8 million, or 25 cents per share, for the first quarter. After adjusting for one-time gains and costs, earnings rose 10 percent to $66.4 million, or 9 cents per share. Analysts surveyed by Zacks Investment Research had forecast earnings of 15 cents per share.

Revenue in the period came in at $786.9 million, beating analyst forecasts of $774.9 million.

Twitter said advertising demand in the first quarter grew strongly, led by the U.S., where ad revenue rose by a quarter. Operating expenses rose 18% to $693 million

For the current quarter ending in July, Twitter said it expects revenue in the range of $770 million to $830 million. Analysts surveyed by Zacks had expected revenue of $821 million.