APTOPIX Wall Street Twitter IPO

Twitter shares gained sharply after the company's quarterly results were released this week. (Richard Drew/Associated Press)

Shares in social media company Twitter spiked Wednesday, a day after as the company revealed it more than doubled its revenue in the last quarter and now claims 271 million people actively use its service every month.

Twitter posted quarterly results late Tuesday that showed the company took in $312 million in revenue in the three months up to the end of June. That's an increase of 124 per cent over the same period a year ago.

The company's shares soared on Wednesday, gaining 20 per cent to trade at $46.47 on the Nasdaq. Twitter went public last November at a price of $26 per share. The stock peaked in December at $74.73 but has declined ever since.

The company also now has 271 million active monthly users, a 24 per cent increase from a year ago, but still much smaller than Facebook, which has 1.32 billion users.

Ad revenue grows

On a per-share basis, Twitter's adjusted earnings were two cents. That's better than the one-cent loss analysts who cover the stock had been expecting.

The revenue and user increases were both better than analysts had been expecting. 

The company also managed to show strong improvement in monetizing that growing user base in the quarter. The company makes most of its money from ads, and on that front, Twitter took in $277 million in ad revenue in the quarter. That's more than double last year's level.

At least one analyst says there's no reason that trend can't continue.

"Twitter continues to see steady improvement in monetization and expects those trends to continue," Nomura's Anthony DiClemente said in a research note after the numbers came out. "[There's] no structural reason that levels of monetization can't reach or exceed industry peers [like] Facebook over time."

Despite the growth, the company is still losing money, with a quarterly loss of $145 million. That compares with a smaller loss of $42 million last year.