Twitter Inc on Thursday widely beat analyst expectations for quarterly revenue as ad sales rose with the return of sports and other events, but it added fewer users than Wall Street had expected.
The company said it expected revenue trends could continue or even improve in the current quarter, but cautioned that it was hard to predict how advertisers would react as the US presidential election nears on November 3, and that there could be a pause in ad spending.
The San Francisco-based social media company said it had 187 million monetizable daily active users (mDAU) during the third quarter, missing consensus analyst expectations of 195.2 million users, according to IBES data from Refinitiv. The figure stood at 186 million in the previous quarter.
Twitter said total revenue grew 14 per cent year-over-year to $936 million during the quarter ended September 30, beating analyst estimates of $777.15 million.
The growth was helped by updated advertising formats, improved ad measurement and the return of events that had been paused due to the pandemic, said Twitter Chief Financial Officer Ned Segal in the earnings release.
Advertisers are often drawn to Twitter because the platform allows them to appear next to major cultural moments or conversation topics such as sports events.
Last year, Twitter suffered from technical glitches that hurt its ability to target ads, though the company has since rolled out fixes.
Ad revenue in the third quarter grew 15 per cent to $808 million from the same period a year ago, surpassing estimates of $645.95 million.
Costs and expenses grew 13 per cent from the same period last year to $880 million, as the company said it spent more on infrastructure-related expenses.
Twitter noted that many companies paused ad spending during the second quarter due to widespread protests after the death of George Floyd in May and said there could be a similar dynamic with the US election.