Twitter shares rose sharply on Tuesday after the microblogging site reported a surprise increase in monthly active users (MAU) for the last quarter that it will publicly disclose the metric.
Monthly active users jumped 9 million, or 2.8%, to 330 million in the first quarter from the previous quarter, much better than analysts’ average estimate that it would lose 2.2 million users.
Twitter earned 37 cents per share as revenue rose 18% to $787 million, with advertising sales in the U.S. up 26%. Analysts had expected earnings of 15 cents on revenue of $776.1 million.
“We’re delivering strong results with ad revenue up 18% year-over-year, demonstrating Twitter’s unique value proposition for advertisers,” Twitter CFO Ned Segal said in a news release.
Twitter shares rose 15.3% in trading Tuesday. The stock had fallen 10% in February after the company posted a decline in monthly users for the fourth quarter.
“Twitter is on a path to sustainable revenue growth and accelerated profit expansion, driven by improvements to the user experience and tools enabling direct response and search advertising,” analyst Michael Pachter at Wedbush Securities told Reuters.
However, Twitter will no longer report the MAU metric, providing instead only “monetizable” daily active users (mDAUs), which measures the number of people exposed to advertising on a daily basis and excludes those who access the site via text messages or aggregators.
In the first quarter, mDAUs rose to 134 million, up 12% from a year ago.
The Verge noted that Twitter monthly active users are still below the peak of 336 million in the same quarter of last year and that the mDAU number “is comparatively tiny. Facebook had 1.5 billion daily users as of the end of last year, having added 28 million in the fourth quarter alone.”
Twitter “tends to see more substantial growth during its first quarter each year, so the bigger test will be if this recent growth can be sustained in the coming months,” the publication said. “Unfortunately, we won’t get a direct answer to that next quarter due to Twitter’s plan to start hiding” the MAU number.