Watch for user engagement when Twitter and Facebook report: Estimize
This week we get a read on the social media space, with companies like Twitter (TWTR), Facebook (FB), Yelp (YELP) and LinkedIn (LNKD) all report second quarter results.
The two big ones are of course Twitter and Facebook.
Estimize is looking for Twitter to post EPS of $0.06 on Tuesday, a penny higher than Wall Street, signifying 200% growth year-over-year. Revenue expectations are for $490.5M, slightly higher than the Street’s $487M and company guidance of $477.5M.
More important than the fundamentals are those closely watched user engagement numbers in the form of average monthly active users (MAUs) and daily active users (DAUs).
Twitter disappointed investors in the latest quarter, posting average MAUs of 302M, an 18% increase, prolonging the fear that the company is not growing fast enough. For comparisons sake, Facebook, a much larger company, recorded MAUs of 1.4B last quarter, up 13%. One issue the micro-blogging site is trying to solve is the fact that users find it too difficult to use.
Twitter hopes the recently introduced instant timeline which populates an individual’s feed based on interests will help to alleviate this problem. The company has also been progressing nicely in regards to mobile, debuting app install ads last quarter, and reporting that 89% of ad revenues now come from mobile. Lastly, investors will be looking for commentary on Twitter’s aggressive bet on video through applications like Vine and Periscope, as well as plans to hire a new CEO to replace Dick Costolo.
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On Wednesday after-the-bell, social media darling Facebook releases results. Estimize is looking for EPS of $0.49 vs. Wall Street’s $0.47, revenues are in-line at $4.0B. Similarly to Twitter, user engagement will be closely followed.
As the market for Facebook continues to mature in the U.S., they are now expanding into tougher demographics. Last quarter saw growth in DAUs outpacing MAUs, and an increase in average time per day spend on the site, all great signs.
Mobile growth remains crucial, with mobile user engagement increasing on both daily and monthly measures, and with mobile ad revenues expanding 83% now making up 72% of the total ad business.
Investors will also want to hear how the company is starting to monetize some of its acquisitions, including Instagram and Whatsapp.
