Standing Pat on Twitter’s Fair Value Estimate

Total second-quarter revenue came in at $574 million, down 5% year over year, due to lower ad pricing and continuing impact of Twitter no longer focusing on TellApart, the retargeting business. Total ad revenue of $489 million represented a 9% decline over the prior year, which included $30 million-$50 million in sales from TellApart by our estimates. The firm’s data licensing revenue went up 26% year over year to $85 million. Twitter is now more aggressively monetizing the user behavior data that it gathers on its main platform. Twitter’s gross margin declined about 300 basis points from last year to 63% as Twitter continues to invest in the costlier premium video content. The firm’s GAAP operating loss of $38 million was an improvement from last year’s $86 million loss, mainly due to some cost control and the benefits of the firm’s restructuring a year ago.

Morningstar Premium Members gain exclusive access to our full analyst reports, including fair value estimates, bull and bear breakdowns, and risk analyses. Not a Premium Member? Get this and other reports immediately when you try Morningstar Premium free for 14 days.