Twitter (NYSE: TWTR ) appears to be making a slow turnaround this year. It recently reported its quarterly performance that outpaced market expectations and delivered its second consecutive profitable quarter. The market is also impressed with some of the content-related moves that the company is making.

Twitter’s Financials

For the first quarter of the year, Twitter’s revenue grew 21% over the year to $665 million, ahead of the market’s projections of $605 million. Clearly, Twitter’s monetization efforts are finally paying off. This was its best quarterly revenue growth in the last two years. Adjusted earnings of $0.21 was also better than the market’s forecast earnings of $0.16 per share. The stock surged 5% post result announcement driven by the better than expected performance.

During the quarter, Twitter’s total advertising revenues grew an impressive 21% to $575 million. Ad engagements grew 69%, while cost per ad engagement fell 28%. Twitter continues to push forward its video advertising and claims that video ads accounted for more than half of its ad revenues. International markets are driving Twitter’s growth as ad revenue in these markets grew 51% over the year. Data licensing revenues for the company grew 20% to bring in the remaining $90 million revenues for the quarter.

Among operating metrics, Twitter ended the quarter with 336 million monthly active users compared with 335 million as expected by the market. It added 6 million users over the previous quarter. Twitter now has 267 million MAUs in the international markets. Its engagement ratios are also improving, as it recorded a 10% growth in the daily active users.

For the current quarter, Twitter expects revenues of $645-$716 million, which was also significantly ahead of the Street’s estimates of $636.5 million.

Twitter’s Product Enhancements

During the quarter, Twitter continued to improve user experience and drive user engagement through several new products. Earlier this year, it launched Bookmarks –  an easier way to allow users to save Tweets; and video timestamps that will allow users to share videos within a live video. The changes will make it easier for users to follow topics and interests more easily.

As part of its video ad enhancements, Twitter is mulling over the option of allowing publishers to sell pre-roll video ads that run before their videos stream. Currently, Twitter manages the pre-roll ads through its Twitter Amplify product. The move could grant publishers more control and also give them the ability to sell Amplify advertising as part of the ad-sales package. Currently, publishers retain 70% of the revenues generated from ads sold on their content, and Twitter retains the 30% share. Twitter does not plan to change that allocation in the near future.

Twitter continued to add to its video content and recently entered into an agreement with Disney’s ESPN. According to the agreement, ESPN will create live sports programming and content for Twitter. ESPN will release breaking news sports coverage on Twitter through SportsCenter Live. It will also allow for fantasy sports podcasts to be live-streamed on Twitter.

With this engagement, Twitter now has more than 30 publishers including Will Packer Media, BuzzFeed News, sports leagues such as Major League Baseball and Major League Soccer, and media giant NBC Universal as part of its video content portfolio. It remains focused on three key areas – sports, news, and entertainment. NBC Universal has already agreed to distribute live video and clips on Twitter through NBC News, MSNBC, and E! News. Viacom is also creating new show formats that will focus on pop culture.

Twitter’s Password Bug

The biggest disappointment for Twitter, though, was the news of the password bug that it found on its platform. Normally, Twitter hashes passwords so that they are stored as a mix of numbers and letters. But it recently discovered that there was a bug that caused passwords to be stored on a log before going through the hashing process. Twitter believes that the passwords haven’t left the Twitter system, but it has asked all its users to change their passwords. Given the mounting rise of privacy concerns that are haunting the social media giants, this news was obviously not well received by the market.

Its stock is trading at $31.85 with a market capitalization of $23.9 billion. It touched a 52-week high of $36.80 in March this year. It has been a better year for Twitter as the stock has climbed from the 52-week low $15.67 that it had fallen to in August last year.