Due to a
combination of ad product “issues” and “headwinds,” Twitter’s third-quarter earnings failed to meet analysts’ expectations, on Thursday.
Not a complete
disaster, the tech staple reported quarterly revenue of $824 million, which was up nearly 10% year-over-year, along with a 17% increase in monetizable daily active users (mDAUs).
Stateside,
average mDAUs reached 30 million, while average international mDAUs grew to 115 million, during the period.
Yet, Twitter executives conceded that quarterly performance was impacted by revenue
product issues and “greater-than-expected seasonality,” which, in their estimation, reduced year-over-year growth by at least 3 percentage points.
“More work remains to
deliver improved revenue products,” Ned Segal, Twitter’s CFO acknowledged on Thursday.
For the quarter ending September 30, Twitter’s ad revenue totaled $702 million, which
was up 8% year-over-year. During the same period, total ad engagements increased 23%, while cost per engagement decreased by 12%.
For his part, Twitter CEO Jack Dorsey said he was proud of the
progress the company is making to clean up its platform.
“We also continue to make progress on health, improving our ability to proactively identify and remove abusive content,
with more than 50% of the tweets removed for abusive content [during the quarter] taken down without a bystander or first person report,” Dorsey stated.
Looking ahead, Twitter executives
said they expected its issues to continue to weigh on the overall performance of its ad business “in the near term.”
Specifically, they expect that “moderated
performance” in Twitter’s Mobile Application Promotion (MAP) product and issues with the platform’s personalization and data settings will result in at least a four-point reduction
in fourth-quarter growth.
Some analysts saw Twitter’s troubles on the horizon.
Earlier this month, Pivotal Research analyst Michael Levine said the firm was cutting
Twitter’s earnings estimates (before interest, tax, depreciation and amortization) for 2020 by 7%.
“We believe the elimination of ad formats may have had a bigger impact than we had
initially expected,” Levine said in a research note.