Twitter on Thursday reported a record increase in daily user growth between April and June, in what appeared to be a surge linked in part to a coronavirus pandemic that led to lockdown measures around the globe.
On an earnings call, the company said that daily average user growth climbed 34 percent in the second quarter, marking its highest ever quarterly year-over-year growth rate. The number of daily active users jumped to 186 million, the company said, noting that it was driven primarily by coronavirus measures and the public conversation about protests that swept the nation following the police killing of George Floyd.
But despite the increase in usage, the company incurred a 23 percent decline in advertising revenue, which serves as a core part of its overall business. The company said that it earned $562 million in ad revenue in the second quarter, attributing the decline to businesses scaling back ad spending amid the coronavirus pandemic and ongoing racial justice protests.
Overall, Twitter reported a loss of $1.2 billion in the second quarter, which it said was largely due to it losing a tax benefit it established last year. The adjusted net loss was $127 million when excluding the income tax expense.
Twitter established a tax benefit in 2019 after transferring intellectual property to Ireland. But the company did not earn enough money to take advantage of the tax benefit in the second quarter, according to Reuters.
Total revenue for the company between April and June came in at $683 million, marking a 19 percent year-over-year decline. Twitter noted that the figures represented a moderate recovering in advertising sales since March, when a spate of shelter-in-place orders in the U.S. led to a sudden drop in ad spending.
The company said that it experienced a 27 percent decline in advertising revenue in the last three weeks of March. It also saw a 15 percent decline in year-over-year ad sales during the last three weeks of June, though it said demand improved as demonstrations subsided.
The mass shuttering of businesses amid the coronavirus pandemic caused a dent in advertising revenue for several tech companies, including Google and Facebook. In addition, an ad boycott targeting Facebook over its content moderation polices has also led some businesses to cut ad spending on social media platforms entirely. Facebook is set to report its second quarter earnings later this month.
Twitter's earnings call came just a week after the company experienced what appeared to be the worst security lapse in its history. In a bitcoin scheme, hackers breached 130 accounts, including those belonging to prominent CEOs and politicians, such as presumptive Democratic presidential nominee Joe BidenJoe BidenCapitol fencing starts coming down after 'Justice for J6' rally Senate parliamentarian nixes Democrats' immigration plan Biden pushes back at Democrats on taxes MORE.
Twitter CEO Jack Dorsey addressed the hack on the call with investors, saying that the company would be "transparent in sharing our learnings and remediations.”
"We moved quickly to address what happened, and have taken additional steps to improve resiliency against targeted social engineering attempts, implemented numerous safeguards to improve the security of our internal systems, and are working with law enforcement," he said. "We understand our responsibilities and are committed to earning the trust of all of our stakeholders with our every action, including how we address this security issue."