Twitter Beats Revenue Expectations But Stalls on User Growth
Twitter sees a 14% revenue increase in Q3 thanks to returning live sports and the election cycle, but its lack of user growth disappoints Wall Street.
Twitter reports a 14% increase in third-quarter revenue, bringing in $936 million and beating analyst expectations. This financial boost comes as live sports, the presidential campaign, and the COVID-19 pandemic drive more traffic to the platform. Additionally, ad revenue grows 15% to $808 million due to increased ad engagement and delayed product launches.
Despite the strong financial performance, Wall Street focuses on the company's lackluster user growth, causing shares to drop nearly 15% in after-market trading. Twitter reaches 187 million monetizable daily active users (mDAUs), which falls short of the expected 195 million. The platform sees virtually no growth in the United States, where mDAUs remain completely flat at 36 million.
While international mDAUs show a slight increase from the previous quarter, the stagnant U.S. numbers overshadow the positive revenue news. Twitter posts a net income of $29 million for the quarter, which is a decline from the same period last year. Company leadership remains confident that ongoing product improvements and upcoming events will eventually satisfy investors.