Jack Dorsey
Courtesy Photo

Twitter outperformed during the second quarter. The San Francisco-based company reported on Tuesday adjusted earnings of 7 cents per share on revenue of $502 million, a 61 percent increase from the same period last year.  

Revenue came in well above the $470 million to $485 million range that Twitter provided as guidance and beat analysts' expectations. Wall Street predicted that Twitter would report adjusted earnings of 4 cents per share on revenue of $481 million. 

The solid second quarter performance sent Twitter's stock up more than 5 percent during after-hours trading on the Nasdaq. The stock closed up 5 percent to $36.54 for the day. 

Investors don't seem to mind Twitter's user growth problem. The company reported that average monthly active users were up 15 percent year-over-year to 316 million. That represents only 14 million new MAUs since the end of the first quarter. Most of the sequential growth, about 12 million, comes from SMS fast followers, a metric that Twitter has recently introduced to break out people who receive Twitter updates via text message without going through the normal sign-up process.

Twitter is coming off a poor performance in the first quarter of the year, when revenue growth fell short of analysts' expectations and sent the social media company's shares down nearly 20 percent. 

Wall Street is watching the nine-year-old company closely as it conducts a search for a new CEO, following the departure of Dick Costolo at the beginning of July. Twitter co-founder and Square CEO Jack Dorsey was named interim CEO while the company searches for a replacement for Costolo, who remains on the board. Dorsey's name has been thrown out as a possible full-time CEO candidate, as has that of Adam Bain, president of global revenue. If 38-year-old Dorsey wants the CEO job, today's conference call with investors, which will be live streamed on Twitter-owned Periscope, just might be his best audition, though he would need to resign from his full-time job running Square to throw his hat in the Twitter CEO ring.  

This article was first published by The Hollywood Reporter.