Twitter Hits 211 Million Daily Active Users In Q3; U.S. Ad Sales Jump 51%, Profits Hit By Litigation Charge
Twitter hit 211 million daily active user last quarter, up 13% from a year ago. In the U.S., daily active users stood at 37 million. Advertising was robust. Shares jumped nearly 4% in after-hours trading.
Revenue of $1.28 billion was up 37%. Twitter sales are advertising based and saw U.S, total sales up 45% to $742 million and ad sales up 51%. That came despite headwinds in digital advertising from new Apple-iOS privacy settings that smashed Snap’s earnings last week and weighed on Facebook yesterday. Apple requires users to opt-in actively if it wants mobile apps to track them across other apps and websites. That makes if harder for advertisers to deliver targeted ads that have become a high-value piece of their business.
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Twitter, compared with some of its peers, depends more on brand advertising, which has taken less of of hit from the iOS change than direct response advertising. (Also unlike some of its peers, it hasn’t been dragged before Congress recently. Facebook, which is being eviscerated by a negative news cycle started by a whistleblower’s leaked documents, had a turn earlier this month. Executives from YouTube parent Google, TikTok and Snap testified today over how the platforms protect children.)
Total advertising revenue of $1.14 billion was up 41%. While year-over-year growth for Q3 ad revenue slowed in comparison to Q2, it was the strongest year-over-year growth in Q3 reported in the last three years, even when taking into account the recovery in ad spend we saw in the year ago period after the initial COVID impact.
The company swung to an operating loss of $743 million on a one-time litigation-related net charge of $766 million. Without that it would have been $23 million. The hit was $809 million to settle a shareholder class action lawsuit — partially offset by an insurance recovery of $5.8
million. During the quarter, Twitter noted that it received insurance proceeds of $38 million related to the settlement of separate, earlier shareholder suits.
“I am proud of our third quarter results. We’re improving personalization, facilitating conversation, delivering relevant news, and finding new ways to help people get paid on Twitter,” said Jack Dorsey, Twitter’s CEO. He said user growth is being driven by “ongoing product improvements and global conversation around current events.”
“We continued to drive increased value for our advertisers thanks to revenue product innovation, including progress on our brand and direct response offerings, strong sales execution, and a broad increase in advertiser demand,” noted CFO Neg Segal.
Execs are hosting a call at 6 pm ET to discuss numbers and outlook.
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