- Twitter reported its third-quarter earnings Wednesday and beat analysts’ expectations.
- The firm reported a total of $936 million in revenue, up 14% from this time last year.
- Twitter’s Q3 ad revenue rebounded, bringing in $808 million, after a 23% year-over-year decline in the second quarter.
- But Twitter’s user growth fell far short of analyst’s expectations, with a reported 187 million daily active users compared to 195 million.
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Twitter’s stock is down 11% in after-hours trading, as the company blew past analyst expectations on revenue but fell short of user growth for Q3.
Here are the key figures from its third-quarter financials, with expectations compiled by Yahoo Finance:
Revenue: $936 million. Wall Street analysts had expected an average estimate of $777.15 million.
Earnings per share: $0.04. Analysts had expected $0.06.
Average monthly users: 187 million, falling short of the 195 million that analysts predicted, but up from the reported 145 million this time last year.
Twitter’s bloated revenue was buoyed by increased ad revenue, which grew 15% year-over-year to $808 million despite a decline in ad spending earlier this year which the company attributed to a widespread response to civil unrest in the US. Twitter made the decision to ban political ads indefinitely in late 2019, and said advertiser activity is “somewhat uncertain” during the time surrounding the 2020 election. The company says it has “no reason to believe that September’s revenue trends can’t continue, or even improve.”
Twitter’s Q3 earnings come after a rocky year for the company. A colossal bitcoin scam-related hack marred its public image in July and prompted the FBI to launch an investigation to determine how secure users’ data is on Twitter’s platform.
Twitter’s earnings report also comes the day after Dorsey participated in a Senate hearing around the protections afforded the company by Section 230, a part of an internet law that prevents tech firms from being liable for content posted on their platforms. Section 230 revisions could lead to a major disruption in these companies’ businesses.
Lawmakers on both sides of the aisle have advocated for amending Section 230, but Republicans have latched onto the idea as part of their belief that tech companies discriminate against conservative content, a theory that is backed up by little evidence.
Twitter has also been faced with pressure to crack down on misinformation in the lead up to the 2020 presidential election, a fact that the firm pointed out in its letter to shareholders Thursday.