(Reuters) – Twitter Inc TWTRN on Thursday added fewer users than Wall Street expected and said spending would accelerate in the current quarter, causing its shares to fall 13 %
The San Francisco-based social media company said it had 187 million monetizable daily active users (mDAU) in the third quarter, missing consensus analysts’ expectations of 1952 million users, data shows IBES from Refinitiv The figure was 186 million in the previous quarter
Costs and expenses rose 13% from the same period last year to $ 880 million as the company said it spent more on infrastructure spending
Twitter said it expects its costs and expenses to grow closer to 20% year-over-year in the current quarter, a rate acceleration in the third
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The company said it expected revenue trends to continue or even improve in the current quarter, but warned that it was difficult to predict how advertisers would react when the ‘US Presidential Election approaches on November 3, and there could be a break in ad spending
Twitter’s sluggish user growth, expected higher costs, and uncertainty over fourth-quarter ad revenue worry all investors, said Michael Nathanson, analyst at research firm MoffettNathanson
Twitter said total revenue increased 14% year-over-year to $ 936 million in the quarter ended September 30, beating analysts’ estimate of $ 777 15 million
Growth was driven by updating ad formats, improving ad measurement and returning events that had been halted due to the pandemic, said Twitter CFO Ned Segal in the results press release
Advertisers are often drawn to Twitter because the platform allows them to appear alongside major cultural moments or conversation topics such as sporting events
Last year, Twitter suffered from technical issues that hampered its ability to target ads, although the company has since rolled out fixes
Third-quarter ad revenue increased 15% to $ 808 million from same period a year ago, beating estimates by $ 64595 million
Twitter noted that many companies suspended advertising spending during the second quarter due to widespread protests after George Floyd’s death in May and said there could be a similar dynamic with the US election
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Twitter, earnings, stocks, Jack Dorsey
World news – CA – Twitter misses user growth expectations, stocks drop 13%
