New York CNN Business  — 

Twitter continues to trail Facebook and Instagram by a wide margin when it comes to the number of users. The social media firm doesn’t generate the type of cool buzz that YouTube, TikTok and Snapchat do among millennials and Gen Z influencers.

Even so, Twitter (TWTR) is having an outstanding 2021 on Wall Street, and its second quarter earnings — posted after the close on Thursday — handily beat estimates. The stock is up nearly 30% this year, slightly outpacing the gains of Facebook (FB) and Snap (SNAP).

The company posted almost $1.2 billion in revenue for the second quarter, a 74% jump compared to the same period last year. Profit came in at $66 million — a sharp turnaround from the loss of almost $1.4 billion recorded a year ago.

Nevertheless, challenges remain.

Twitter launched a Snapchat-esque disappearing tweets feature called Fleets last year but has already pulled the plug on it, saying the function will go away in August.

The company hasn’t “seen an increase in the number of new people joining the conversation with Fleets like we hoped,” Ilya Brown, Twitter’s vice president of product, wrote in a blog post earlier this month.

Looking for more users

The Fleets failure is emblematic of Twitter’s challenges: trying to prove to users and advertisers that it can be more than a news wire on steroids for media junkies. Donald Trump also is no longer a presence on the platform, having been banned just weeks before his presidency ended following the violent protests at the Capitol on January 6.

That leaves Twitter in the uncomfortable position of being accused of anti-conservative bias while trying to fill a giant content void to attract more users.

Twitter ended the second quarter with 206 million users, up nearly 11% from a year ago and more than 3% above the 199 million users it had at the end of March. That’s steady, but not spectacular, growth.

Some shareholders are also worried that Twitter hasn’t done enough to crack down on controversial content.

Activist firm and Twitter investor Arjuna Capital made a shareholder proposal at the company’s annual meeting in late May that called for the company to add someone with a human rights or civil rights background to its board. Or better yet, both.

Arjuna has made similar proposals to Facebook as well as Google and YouTube owner Alphabet (GOOGL), but its suggestions have been voted down by shareholders at those companies.

“Only after the violent attack on the U.S. Capitol was Donald Trump banned from the platform to stop the further incitement of violence,” said Natasha Lamb, managing partner at Arjuna Capital, at Twitter’s annual meeting.

“The ties between the company’s business model and threats to civil and human rights can no longer be ignored,” she added. “And while this model has been profitable, it is increasingly problematic, threatening Twitter’s brand and social license to operate.”

Ad revenue is the lifeblood of Twitter’s business, accounting for about 85% of total sales.

Lamb argued that “Twitter is losing the trust of its advertisers, users, and perhaps most importantly, public policymakers.”

Should Dorsey focus more on Twitter? Or Square?

Twitter isn’t out of the woods with politicians yet, either. Trump is suing CEO Jack Dorsey, along with Faceboook’s Mark Zuckerberg and Alphabet’s Sundar Pichai, over his bans from the platforms.

During the Twitter annual meeting, Dorsey said about Trump that “we went directly towards our terms of service in the removal of that account. There’s no switching from that. When we permanently ban an account, we permanently ban it.”

Yet there are members of Congress from both parties who are concerned about the presence of misinformation on Twitter and other social media platforms, which raises worries that they may try to impose stricter regulations down the road.

Finally, some Twitter investors and analysts are still anxious about Dorsey being stretched too thin, because he continues to run Twitter as well as the digital payments giant Square (SQ).

There have been intermittent calls from analysts for Dorsey to choose one of his companies and manage it full time. Square’s stock has been a much better performer since its 2015 initial public offering than Twitter has since going public in 2013. For that reason, some analysts think Dorsey needs to dedicate all his efforts to growing Twitter. But others argue that he should capitalize on Square’s success and let someone else run the social media platform.

And while other tech executives, most notably Elon Musk of Tesla (TSLA) and SpaceX, juggle two top jobs, Dorsey could follow the example of Jeff Bezos, who recently stepped down as CEO of Amazon (AMZN) in order to focus on his space company Blue Origin and other business interests such as The Washington Post.

— Michelle Toh contributed to this report.