- Twitter reported its third-quarter earnings Thursday before the opening bell.
- Twitter reported earnings of $0.21 a share on revenue of $758.1 million.
- But Twitter did suffer steep declines in monthly active users, which fell by 4 million year-on-year to 326 million.
- Follow Twitter's share price in real time here.
Twitter was soaring Thursday after beating Wall Street estimates on revenue and profit for the third quarter of 2018.
Twitter's share price was up more than 10% in premarket trading as investors took courage from the firm's 29% year-on-year revenue rise.
But it's a mixed picture. Wall Street will also be looking at Twitter's steep declines in user numbers.
Here are the key numbers:
- Revenue: $758.1 million, up 29% year-on-year and beating average analyst estimates of $702.57 million
- Earnings per share: $0.21 on a diluted basis, compared with an average prediction of $0.14
- Monthly active users: Down by 4 million year-on-year to 326 million
Twitter's drop in monthly active users was even more pronounced compared with the second quarter, when it had 335 million users.
Twitter blamed the fall on European's new privacy regulation, the company's efforts to stamp out toxic conversations involving misogyny and racism, decisions not to move to paid carrier relationships in some markets, and tweaks to the platform meant to reduce automated use. It also blamed a "technical issue" that reduced how many notifications people received.
Twitter said it had seen a 20% reduction from the previous quarter in "successful sign-ups" from automated, spammy, or malicious accounts.
The company doesn't disclose daily active users but says this is a more important metric than monthly active users. Daily active users grew 9% over the quarter, which the company said was slower than expected because of its efforts to combat spam.
DAU growth was impacted by our ongoing health efforts, both due to how we resourced + prioritized our work + the impact we see on disclosed metrics from ongoing success removing spammy + suspicious accounts. #TWTR— Twitter Investor Relations (@TwitterIR) October 25, 2018
"We're achieving meaningful progress in our efforts to make Twitter a healthier and valuable everyday service," Twitter CEO Jack Dorsey said in a statement.
"We're doing a better job detecting and removing spammy and suspicious accounts at sign-up. We're also continuing to introduce improvements that make it easier for people to follow events, topics, and interests on Twitter, like adding support for US TV shows in our new event infrastructure.
"This quarter's strong results prove we can prioritize the long-term health of Twitter while growing the number of people who participate in public conversation."
Twitter warned that investors could expect a similar sequential decline in user numbers in the final three months of 2018.
Based on our current level of visibility, we expect the decline to be mid-single-digit millions of MAU. As a reminder, DAU growth continues to be the best measure of our success in driving the use of Twitter as a daily utility. #TWTR— Twitter Investor Relations (@TwitterIR) October 25, 2018
Here's the outlook for the final quarter:
- Adjusted EBITDA: $320 million to $340 million
- Capital expenditures: $60 million to $85 million
- Stock-based compensation: $85 million to $90 million