Twitter Q3 earnings 2018 – Business Insider

Twitter is soaring after beating Wall Street estimates on revenue and profit for the third quarter of 2018.

Twitter’s share price was up more than 10% in pre-market trading, as investors took courage from the firm’s 29% year-on-year revenue rise.

But it’s a mixed picture. Wall Street will also be looking at Twitter’s steep declines in user numbers.

Here are the key numbers:

• Revenue: $758.1 million, up 29% year-on-year and beating average analyst estimates of $702.57 million.
• Earnings per share: $0.21 on a diluted basis, compared with an average prediction of $0.14
• Monthly active users: Down four million year-on-year to 326 million, from 330 million in 2017.

Twitter’s drop in monthly active users was even more pronounced compared to Q2, when it had 335 million users.

Twitter blamed the fall on European’s new GDPR privacy regulation, its efforts to stamp out toxic conversations such as misogyny and racism; decisions not to move to paid carrier relationships in some markets; and tweaks to the platform to reduce automated usage. It also blamed a “technical issue” that reduced how many notifications people receive.

Twitter said it had seen a 20% reduction from the previous quarter in “successful sign-ups” from automated, spammy, or malicious accounts.

The company doesn’t disclose daily active users, but says this is a more important metric than monthly active users. Daily active users grew 9% over the quarter, slower than expected thanks to Twitter’s efforts to combat spam.

In a statement, Twitter CEO Jack Dorsey wrote: “We’re achieving meaningful progress in our efforts to make Twitter a healthier and valuable everyday service.

“We’re doing a better job detecting and removing spammy and suspicious accounts at sign-up. We’re also continuing to introduce improvements that make it easier for people to follow events, topics and interests on Twitter, like adding support for US TV shows in our new event infrastructure.

“This quarter’s strong results prove we can prioritize the long-term health of Twitter while growing the number of people who participate in public conversation.”

Twitter warned that investors could expect a similar sequential decline in user numbers in the final three months of 2018.

Here’s the outlook for the final quarter:

• Adjusted EBITDA: $320 million to $340 million.
• Capital expenditures: $60 million to $85 million
• Stock-based compensation: $85 million to $90 million.