Twitter's User Growth Remains a Concern

MAUs grew to 310 million, representing 1% sequential growth, and 3% growth versus first-quarter 2015. Mobile continues to be a growth platform for the company, now at 83% of total MAUs, up 3% sequentially. While we believe the company still has room to expand its user base, we do think growth will continue to be relatively slow and cap out in the mid-single digits.

Overall revenue grew 36% to $595 million, bolstered by mobile advertising, which represented 79% of total revenue. Management blamed the lighter revenue on lower-than-projected brand spend on legacy products which was partially offset by ongoing strength on the video ad side. The company will continue to invest in video tools to help advertisers to better target and verify specific demos. The video tools are expected to roll out at the same time as Twitter launches its live NFL streaming offering this fall.

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