Yahoo Finance Twitter Management Talks Machine Learning, Platform Health, and More
Shares of Twitter (NYSE: TWTR) soared last week, following its second-quarter update. Investors were impressed by the social network's strong growth in revenue and users. Daily active user growth was particularly impressive, as the key user metric saw a 14% year-over-year increase -- an acceleration from 11% growth in Q1.
While the headline metrics from the earnings release were notable, you can learn more about Twitter's recent performance and initiatives in the company's second-quarter conference call. Here's a look at some key takeaways from the call.
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International momentum
While Twitter's acceleration in daily active user (DAU) growth was helped by a 10% increase in U.S. users, investors should note that growth was more impressive internationally. DAUs rose 15% internationally, highlighting the company's strong momentum outside the U.S.
Better yet, management said it saw "broad-based DAU growth" internationally. This strength "leads us to want to continue to focus on the opportunities that we see outside of the United States as well," said Twitter CFO Ned Segal.
Twitter's top priority
Management said that improving the health of conversation on Twitter remains the company's top priority.
During Q2, Twitter's health efforts focused on identifying and addressing malicious activity and making its rules easier to understand. Ongoing health initiatives are impacting costs. Operating expenses in Q2 increased 20% year over year -- faster than Twitter's 18% revenue growth. Management said expenses related to its health initiatives were one of the key drivers of this growth.
But management also believes that its investments in health are helping drive business growth. When asked by one analyst whether investments in health have gone from weighing on user growth to driving growth, Twitter CEO Jack Dorsey responded:
As we've talked about on this call before, we do believe that health is a long-term growth factor for us, and we have been doubling our efforts to make sure that we can address all the issues that we're seeing on the service.
Embracing machine learning to move faster
One theme Dorsey talked about in his opening remarks during Twitter's earnings call was the company's increased agility and its ability to "move much faster." When asked later during the call what he meant by this, Dorsey said it boils down to three things: increased focus, better use of technology, and people.
His comments on how Twitter is capitalizing on technology to be more agile were particularly interesting. The strategy boils down to deployment of machine learning technologies, he explained:
We've gotten better at hiring and acquiring teams that are focused on bringing a much higher bar of machine learning and deep learning discipline to every problem domain that we face, and we approached every problem now with technology first.
With daily active user growth accelerating, health initiatives going well, and Twitter executing with more agility than ever before, shareholders should be pleased with the social network's recent performance.
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Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Twitter. The Motley Fool has a disclosure policy.
