On The Fly: What to watch in Twitter earnings report

Twitter (TWTR) is scheduled to report results of its second fiscal quarter before the market open on July 27, with a conference call scheduled for 8:00 am ET. What to watch: 1. USER METRICS: Twitter's monthly active users, or MAUs, are a closely watched measure of its popularity and growth potential. Last quarter, the company grew global MAUs roughly 2.8% sequentially to 328M, while its U.S. base increased approximately 4.4% sequentially to 70M. Watch for updated numbers in the report, as well as management commentary on user engagement. 2. AD REVENUE: Key to Twitter's business model is its ability to drive advertisers to the platform. In the first quarter, the company reported a roughly 11% fall in ad revenue versus last year and said, "We continue to expect revenue growth to meaningfully lag audience growth in 2017. We believe, however, that executing on our plan and growing our audience should result in positive revenue growth over the long term. " In an note on July 24, Wedbush analyst Michael Pachter said reacceleration of user growth and an improving user experience are "positive signs," but he thinks advertisers will devote their ad budgets to platforms with better targeting, reach, and scale until Twitter can return to revenue growth. 3. NEW PRODUCTS, 'LIVE' STRATEGY, STREAMING DEALS: Since Jack Dorsey's return as CEO, Twitter has increasingly pivoted into new content such as live-streamed events and sports while tweaking its core product. In the quarter, the company announced several streaming partnerships, new data controls and an updated privacy policy. In its direct messages, the company added business location-sharing, a "Requests" filter and provided businesses with the ability to attach buttons to the messages. Twitter also introduced the Twitter Lite mobile web app and later rolled out a new app design. Watch for the impact of those additions, as well as the return of co-founder Biz Stone.