Twitter, Snap post big revenue jumps in Q2

New and revamped ad offerings helped both social networks surpass analyst expectations.

Both Twitter and Snap had big increases in revenue and users in Q2, attributed largely to improvements in the capabilities they offered large and small advertisers on their platforms.

Twitter’s total revenue grew 74% year-over-year in the three months ending in June, reaching $1.19 billion USD, with ad revenue up 85% on a constant currency basis.

While many ad-focused companies have had impressive-looking growth numbers in Q2 so far, thanks to favourable comparisons to the same period in 2020 when the industry faced the biggest declines of the pandemic, Twitter – like other digital companies – did not face as steep of a decline last year. The number of monetizeable daily active users – those who are able to view ads on the platform – also grew by 11% to 206 million.

Twitter attributed the revenue growth largely to an increase in advertiser demand, spurred by launches of new and improved ad products that have provided better ROI for advertisers, as well as the return of major events that users tend to engage with on the platform.

Ned Segal, Twitter’s CFO, said during an investor call that Mobile App Promotion has continued to have strong momentum since being revamped in February, calling out streaming services as one category that grew spend by 40% over last quarter. New innovations, like the ability to play games within ads and multi-dimension carousels, are among the new features Twitter is testing, aims to keep momentum strong for the rest of the year.

And while Twitter has typically been known for mass reach around global events, Segal added that small businesses had another strong quarter on Twitter and would be a continued focus for the platform, thanks to improved location- and age-based targeting.

Meanwhile, Snap’s revenue increased 116% year-over-year in Q2 to $982 million USD. While partially due to a favourable comparison to 2020, Snap’s other KPIs pointed to strength in its business: its net loss improved by 53%, with daily active users increasing by 23%.

Like Twitter, Snap also improved its offering for advertisers in Q2, including opening up public profiles to any business, launching integration with Salesforce to integrate first-party data into campaigns, connecting advertisers with certified Lens Creators within its self-serve ad manager and introducing a capability to automatically update product inventory in AR lenses.

Jeremi Gorman, Snap’s chief business officer, also said that the company was not impacted by Apple’s iOS 14.5 update as it had expected, both due to users being slow to update their devices but also because opt-in rates to cross-app data sharing were higher compared to those it is seeing across the industry.