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Twitter
Inc.
tWTR -4.28%
announced its first consecutive quarterly decline in the number of users, losing more than expected and announcing further declines as purge of fake accounts.
Even so, Twitter said it has increased revenue and earnings in the third quarter, pulling more advertising revenue from existing users.
The results sent Twitter actions in full swing. The stock was up more than 12% to $ 31 in pre-market.
The number of active monthly Twitter users worldwide has decreased by 9 million compared to the second quarter, reaching 326 million, the largest decline ever recorded. Three months ago he had indicated that he was expecting a drop in the number of monthly users in the order of millions of dollars. The previous largest decline was two million in the fourth quarter of 2015.
The results reflect the negative impact on Twitter's user base as the company battles what it calls spammy and suspicious accounts, particularly in the months leading up to the mid-term US elections. . In the previous quarter, signs of slowing growth in social media companies, including
Twitter
,
Facebook
Inc.
and
Break
Inc.
sent their careening stocks.
Twitter attributed the drop in the number of monthly users partly to the factors that had affected it last quarter, namely the removal of false accounts and the impact of the new European law on the protection of privacy. The crackdown on automated usage such as robots, as well as the bug fix in e-mail notifications, also contributed to the decline, the company said.
Twitter expects its work on forgery removal and the law on privacy to continue to drive down the number of users in the current quarter, resulting in a drop in the number of users. million to one digit.
Total third-quarter revenue totaled $ 758.1 million, up 29%, mainly driven by ads and the largest increase since the first quarter of 2016. Analysts were forecasting 702, $ 6 million, according to Thomson Reuters estimates.
Net income reached $ 789.2 million, representing a tax benefit of $ 683 million, compared with a loss of $ 21.1 million a year ago. Adjusted earnings are set at 21 cents a share, well above the 14 cents forecast by analysts, according to Thomson Reuters.
Daily active users, meanwhile, increased by 9% over the previous year, breaking the series of gains recorded in the last seven quarters between 10% and 14%.
Twitter, which does not disclose the actual number of daily users, attributed this lower growth to a drop in the number of people who primarily use the service solely through web browsers. He added that these users generally have less value than those who access Twitter via the Web and mobile devices. The growth of these users has increased by a two-digit percentage, the company said.
For the fourth quarter, Twitter projected adjusted earnings before interest, taxes, depreciation and amortization of between $ 320 million and $ 340 million.
Write to Sarah E. Needleman at [email protected]
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