Twitter’s transformation of its advertising products achieved results in the second quarter, as it reported that its revenue and forecast sales for the quarter were higher than analysts expected.

The San Francisco-based social media group said its revenue in the second quarter increased by 74% year-on-year to US$1.19 billion, exceeding market consensus by US$1.06 billion.

According to data from Standard & Poor’s Capital IQ, it also estimates that its third-quarter revenue will be between US$1.22 billion and US$1.3 billion, which is higher than the current analyst estimate of US$1.17 billion.

However, the number of Twitter users in the United States has fallen by 1 million since the first quarter to 37 million. Chief Financial Officer Ned Segal attributed it to factors such as a calmer news cycle and people’s freedom from blockade.

After the financial report was announced, Twitter’s share price rose nearly 5% in after-hours trading.

In a letter to shareholders, Twitter listed “revenue product improvements, strong sales execution and broad growth in advertiser demand” as the main drivers of revenue growth.

The company recently overhauled its products to advertisers to improve its positioning capabilities and make it easier for small businesses to carry out activities. It added that user engagement with advertising has increased by 32%, while the cost per participation has increased by 42% year-on-year.

Twitter also said that monetizable daily active users-a local indicator of the number of logged-in users to which computing platforms display ads-increased 11% year-on-year to 206 million, in line with analyst expectations.

The company has been developing many features, including tools for rewarding or subscribing to content creators to increase engagement and diversify revenue sources other than advertising. It now expects the number of employees and expenses for the full year to grow by at least 30%, which is higher than the guidance of 25% in the previous quarter.

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