Twitter records $1.19bn revenue in Q2 as Jack Dorsey insists Bitcoin is the company’s future

2021 is shaping up well for Twitter if the numbers showing its performance in Q2 are any indication. The micro-blogging company released its earnings report on July 22 and declared a total revenue of $1.19 billion.

Compared to the $683 million that was posted in Q2 2020, Twitter’s revenue grew by 74%, showing a remarkable bounce back from the harsh economic effects of the Covid-19. Its shares rose by as much as 9% on Thursday evening after the release of its Q2 2021 earnings report.

Also Read: Twitter Ads Revenue Falls by $25M in Q1 2021 as Growth in Monetisable Users Fail to Drive Earnings

The revenue growth surpassed what analysts had forecast for the company. According to Refinitiv, analysts expected Twitter to post revenue of $1.07 billion but it over-delivered with $1.19 billion. After a loss of $1.38 billion in Q2 of 2020, the company recorded a profit of $65.6 million.

The capital gains that will be distributed to each shareholder also surpassed what analysts expected. Each shareholder will earn 20 cents per share instead of the 7 cents per share that were expected.

Twitter’s performance fell shy of expectations in the area of monetizable Daily Active Users (mDAU). Its total mDAU is 206 million which is less than the 206.2 million users that are expected at the end of the quarter. It recorded an 11% growth in the monetizable Daily Active Users or users who view advertisements that are placed on Twitter.

The tweaks that led to Twitter’s impressive record

Twitter introduced a series of features that are designed to help more people find new reasons to use the platform. It added Tip Jar, Ticketed Spaces, and Super Follows. The features also let people directly support creators by tipping or paying for access to exclusive live audio experiences with Ticketed Spaces. Users can also pay for other exclusive content that is only available via monthly subscription through Super Follows.

After it launched Spaces to rival Clubhouse’s audio service, Twitter says it has continued to rapidly ship improvements to the service.

Besides enabling all accounts with 600 or more followers to host a Space and creating more ways to find and drop into Spaces, Twitter says it also improved “live captions for accessibility, making Spaces available via mobile and desktop web, and providing support for co-hosts as well as the ability to schedule and set reminders for upcoming Spaces.”

Also in the same quarter, it launched more than 2,500 new topics like Fintech, Venture Capital and Startups that people can follow and immediately join conversations in the space. This, in turn, led to 41% of new customers in supported languages following an average of 14 topics each during sign-up.

All of these served to retain more people on Twitter while making it a place for real-time conversations.

Despite the ongoing ban on the platform in Nigeria, the tech giant has had an impressive Q2. The US remains its strongest market with a 79% increase in revenue year on year to $653 million. Japan is still its second-largest market and it grew by 40% in the quarter. The revenue from Japan amounts to $151 million, which is 13% of the entire revenue for the quarter.

In Q3, the company expects to see revenue of $1.22 billion to $1.30 billion. This is more than the $1.17 billion that analysts are predicting, according to Refinitiv.

Bitcoin is a ‘big part’ of Twitter’s future

Twitter CEO, Jack Dorsey, has revealed that a significant part of the plans to further expand the business is hinged on Bitcoin. This is not the first time Dorsey is referencing Bitcoin, but it is the first time that he is specific about its application.

He explained further that digital currency will be integrated into existing Twitter products and services including commerce, subscriptions and other new features like the Tip Jar and Super Follows.

During the investors’ call, Dorsey said, “If the internet has a native currency, a global currency, we are able to move so much faster with products such as Super Follows, Commerce, Subscriptions, Tip Jar, and we can reach every single person on the planet because of that instead of going down a market-by-market-by-market approach.” 

More importantly, the Twitter CEO says there is a lot of innovation above just currency to be had and pointed out how Bitcoin could help decentralise social media more and provide more economic incentives.

“There’s an obvious need for this, and appreciation for it. And I think that an open standard that’s native to the internet is the right way to go, which is why my focus and our focus eventually will be on bitcoin”

Jack Dorsey

With Q2 over, the race is on for Twitter to ensure that its Q3 results are more impressive than its predecessor. From Dorsey’s remarks at the shareholder meeting, the company’s efforts will soon include Bitcoin and eventually, the focus will be on the cryptocurrency.