Disappointing third-quarter profit and revenue at Twitter overshadowed strong user growth, sending shares of the social media company plummeting 16 per cent before the opening bell.
The San Francisco company also lowered its outlook for the fourth-quarter and for the year and blamed some of its problems in the most recent quarter on bugs related to its advertising platform.
The company said it’s addressing those issues, but that they will likely weigh on its advertising business in the near term.
Net income was $37 million US, or 5 cents per share. Removing non-recurring charges, per-share profit was 17 cents, 3 cents shy of Wall Street expectations, according to a survey of industry analysts by FactSet.
It was a 65 per cent drop from last year’s adjusted profit of $106 million.
Revenue was $824 million, an increase of 9 per cent over the same period last year, but well short of Wall Street’s projections of $874 million.
User base grew 17%
Twitter says its daily user base grew last quarter to 145 million, an increase of 17 per cent over the 124 million in the same period of the previous year and compared to 139 million in the previous quarter.
Twitter started disclosing its daily user base earlier this year. These are users who log into the site at least once a day and see advertisements on the platform. Twitter says the daily metric is replacing its monthly user count, which it will no longer disclose.
The company said it has made progress on what it calls the “health” of its platform. The microblogging service, which has been criticized in the past for not doing enough to combat abusive comments and users, says it has been proactively identifying and removing such content. CEO Jack Dorsey said Thursday that more than 50 per cent of the tweets removed for abusive content last quarter were taken down before they were reported.
Twitter now projects fourth-quarter revenue of $940 million, the lower end of its previous guidance range and short of the $1.1 billion analysts were looking for.
Advertising revenue came to $702 million for the quarter, an increase of 8 per cent over the third quarter last year.
The company said data licensing and other revenue totalled $121 million, an increase of 12 per cent over 2018’s third quarter.