shares rose more than 15% after the social media company said on Thursday that it did better work to attract more revenue from people even use the service The number of relocated users declined again in the third quarter as counterfeit accounts continued to be erased.
Twitter said the number of monthly active users worldwide, by Wall Street for years the most monitored metric, fell by nine million from the second quarter to 326 million ̵
Despite the decline and slowdown in daily user growth to 9%, Twitter posted a significant increase in advertising revenue, particularly in the US
Overall, third-quarter revenue increased 29% to $ 758.1 million, the largest Part of this is the number of ads and the largest increase since the first quarter of 2016. Analysts had expected $ 702.6 million, according to estimates by Thomson Reuters.
Investors are beginning to divest Twitter's growth from its ability to make money, said Brian Wieser, an analyst at Pivotal Research Group.
"There is an acceptance that users may not grow and that's fine," he said. If Twitter continues to improve the quality of its services and develop better ad products, "then it can grow its business pretty quickly."
This is an issue recently highlighted by Chief Executive Jack Dorsey, who told analysts on Thursday that the platform is ultimately helping users grow. "We continue to progress against some of the health initiatives we see, especially suspicious applications this quarter," he said.
Net income was $ 789.2 million, inflated by a tax benefit of $ 683 million, compared to a loss of $ 21.1 million a year ago. Adjusted earnings were 21 cents a share, well above analyst estimates of 14 cents, according to Thomson Reuters.
The company's shares, which had tumbled nearly 6% on Wednesday as technology stocks drove the market down, traded in the morning trade. The stock rose more than 20%, rising more than 15% to $ 31.87.
Twitter's improvements to its product are having an impact, BTIG analyst Richard Greenfield said. "They're throwing you the right tweets when you open the app, and they're better at showing you ads, which leads to significant sales bills," he said.
Twitter said the company offers better ad serving in users' timeframes, but has more advertising channels available. "We see a lot of opportunities and potential in the search," said CFO Ned Segal.
Wall Street saw Twitter's second-quarter decline in monthly users, and a warning that there might be a further decline in the current quarter. Twitter was partly responsible for the same factors that had plagued him in the last quarter – the removal of fake accounts and the impact of the new European data protection law. A crackdown in automated usage, such as bots, and a flawed e-mail notification error since then also contributed to the decline, according to the company.
Thursday's stock surge was far from three months ago, as Twitter's user base dwindled, raising concerns over a slowdown in growth among social media companies, including Twitter.
and Snap Inc. – worries that got their shares off the ground.
Daily active users grew 9% year over year, breaking a seven-quarter profit margin between 10% and 14%. Twitter, which reveals no real numbers for daily users, attributed the slowdown to a decline in users who only use the service via web browsers – people who are less valuable than those who also access Twitter via mobile devices. According to the company, the growth in these users in the double-digit percentage range. In the fourth quarter, Twitter projected adjusted earnings before interest, taxes, depreciation and amortization between $ 320 million and $ 340 million.
Write to Sarah E. Needleman at [email protected]