Twitter shares plunge after disappointing Q3 profit
Social media giant blames advertising bugs and lack of big summer events
Social media giant Twitter’s stock price has fallen by over 18.5 per cent after an underwhelming third quarter revenue and profit report. The company blamed advertising problems, including product bugs, and unusually low demand during the summer
Twitter had forecast that its Q3 revenue growth would lag behind the first two quarters, due in part to its ending some older ad formats. But advertising also encountered unexpected problems, such as bugs, which limited its ability to target adverts and share data with advertising partners. It also said that this summer had fewer big events than last year, leading to a drop in traffic.
However CEO Jack Dorsey tried to mitigate the bad news, saying that product improvements such as proactively removing and identifying abusive content and streamlining navigation increased Twitter’s monetisable daily active usage (mDAU).
Instead of disclosing monthly active users, Twitter reports the mDAU metric, its own creation which measures a user's daily exposure to advertising. These exceeded analyst predictions by 4 million, reaching 145 million according to numbers from financial data provider Refinitiv.
Twitter’s revenue is up 9 per cent on the same time last year to $824m (£656m), with advertising revenue up 8 per cent year-on-year. Both were well below analyst expectations of $874m and $702m respectively.
The company’s operating expenses far exceeded its revenue growth, rising by 17 per cent on year-on-year to $780m.