Twitter's Ad Revenue Explodes

Twitter’s stock price was up about 4% in extended trading on Tuesday after the company reported its third-quarter earnings, meeting analysts’ expectations for revenue and user growth.

CNBC reports the company said it was taking a one-time litigation-related net charge of $766 million related to an $809.5 million settlement the company announced in September for allegedly misleading investors about user growth.

Here’s what Twitter reported versus Wall Street’s estimates:

• Earnings: 18 cents per share, adjusted vs. 15 cents as expected by analysts polled by Refinitiv.
• Revenue: $1.284 billion vs. $1.285 billion as expected by analysts polled by Refinitiv.
• Monetizable daily active users (mDAUs): 211 million vs. 211.9 million as expected by analysts.

Because of the legal settlement, Twitter reported a net loss of $537 million, compared to a profit of $29 million a year ago.

Revenue increased 37% in the quarter from a year earlier. Twitter said the impact of Apple’s iOS privacy change was less than expected in the period, and will be modest in the fourth quarter. Snap and Facebook both cited Apple’s new iOS 14 privacy features as the main reason for business disruption in the latest quarter.

Twitter ’s ad revenue rose more than 41% to $1.14 billion, with total ad engagements increasing 6% from a year earlier.

Unlike Snap and Facebook, demand for Twitter’s ads have not been impacted by global supply chain issues, Twitter CFO Ned Segal said in a call with analysts. That’s because more than half of Twitter’s ad revenue in 2021 is associated with services and digital goods, Segal said.

Twitter’s total number of monetizable daily users grew by 5 million from the second quarter to 211 million. The user base was up nearly 13% from a year ago.