Fewer new users than what Wall Street analysts were expecting were added by social media company Twitter Inc for the third quarter, the company said on Thursday. It also added that it would also see an acceleration of costs in the fourth quarter.
These two elements pushed down eth stocks of the company by as much as 16 per cent.
In the fourth quarter, Twitter’s expenses were expected by it to get increased by as much as 20 per cent year on year in the fourth quarter, said the San Francisco-based social media company, because of new investments that the company planned to make during e next quarter.
It was also difficult to predict the reaction of advertisers as the date for the US presidential election gets near, the company also cautioned.
Shares of Twitter fell to $44.00 in after-market trading.
Because of the widespread protests after the death of George Floyd in May, many companies and advertisers paused ad spending during the second quarter, Twitter said, and added a similar dynamic could take place surrounding the forthcoming US presidential election.
During the third quarter, it had 187 million monetizable daily active users (mDAU), Twitter said which missed the consensus expectations of analyst at 195.2 million users, according to IBES data from Refinitiv.
In the previous quarter, that number was at 186 million.
Despite this, during the quarter ended September 30, there was a 14 per cent year on year increase in total revenue at $936 million which however beat estimates of analysts hich was pegged at $777.15 million.
Twitter Chief Financial Officer Ned Segal said during an earnings call with analysts that the return of events that had been paused due to the novel coronavirus pandemic, improved ad measurement and updated advertising formats helped in driving up the revenue growth.
For the rest of the current quarter, Twitter expects revenue trends could continue or even improve except for the period of the US presidential elections, the company said.
There was a 15 per cent year on year growth in ad revenue in the third quarter which came in at $808 million which easily left behind analysts’ estimates of $645.95 million.
As it was currently working to integrate new mobile phone data privacy requirements, therefore the launch of a new advertising product would be delayed by Twitter until 2021, the company also said.
For the third quarter, the company reported an increase of 13 per cent in costs and expenses at $880 million compared to the same period a year ago because of higher spending on further development of its infrastructure, the company said.
The company also reported a net income of $28.66 million, or 4 cents per share, for e third quarter which was lower than what the company had reported in the same period a year ago at $36.5 million, or 5 cents per share.
(Adapted from MoneyControl.com)
Categories: Economy & Finance, Strategy, Sustainability, Uncategorized
Leave a Reply