Social media giants Facebook and Twitter released second quarter earnings earlier this month; here are some key figures that investors will be looking at.
Earnings season is well underway
and this month saw two of the biggest hitters release their reports to markets;
Facebook and Twitter.
First up was Facebook, which just
two years after its IPO is now firing on all cylinders and has beaten even the
most optimistic forecasts. It is now one of a handful of S&P 500 companies
growing at more than 20 percent a year.
Twitter followed with some
expectation-busting figures of its own. "Our strong financial and
operating results for the second quarter show the continued momentum of our
business," said CEO Dick Costolo,
But it’s still Facebook that
shades it. Let’s take a look at the key data points.
Two years after its IPO, Facebook is firing on all cylinders and has beaten even the most optimistic forecasts. Photo: Shutterstock
Earnings per share (EPS) for
Facebook came in at 0.42 in Q2 versus 0.32 for its last earnings release.
Compare that with Twitter, which
posted a meagre 0.02 EPS. Small in comparison with Facebook it was nevertheless
a huge improvement on the negative 0.12 in the prior year period.
Average revenue per user (ARPU)
for Facebook climbed $2.24, up from $2 in the previous quarter as the number of
daily active users soared 39 percent to 829 million worldwide. Monthly users
rose 14 percent to 1.32 billion. Revenues for the quarter climbed to $2.91
Twitter saw revenue for the
second quarter of 2014 rise to $312 million, an increase of 124 percent from a
year before. Average monthly users climbed 24 percent to 271 million, meaning
ARPU came in a little over a buck, half that of Facebook.
Facebook continues to deliver
strong sales growth, with advertising revenue up 67 percent to $2.68 billion
compared to the same quarter last year. Twitter more than doubled it sales to
Peter Garnry, head of Equity Strategy at Saxo Bank, was hugely
impressed by the Facebook numbers. He says: “Based on the Q2 numbers we are
confident that the model will maintain a very rosy outlook, and Facebook is
likely to stay on the conviction buy list.