Twitter shows how to get ahead in advertising with strong Q3

25 Oct 201899 Views

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Twitter user. Image: Andrew Lozovyi/Depositphotos

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Ad sales are up but monthly active users are down.

Twitter has reported a strong third quarter with revenues of $758m, up 29pc year on year thanks to strong advertising sales.

However, monthly usage is falling, with monthly active users down 9m from 330.1m since the second quarter to 326m users. Daily active users, on the other hand, are up 9pc.

‘This quarter’s strong results prove we can prioritise the long-term health of Twitter while growing the number of people who participate in public conversation’
– JACK DORSEY

Shares rose 15pc in pre-market trading as the company beat market estimates. Earnings per share in the company were 21 cents versus Wall Street estimates of 14 cents per share.

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

“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 prioritise the long-term health of Twitter while growing the number of people who participate in public conversation.”

Tweet or treat

Man in black t-shirt and beard smiling.

Twitter CEO Jack Dorsey in Dublin. Image: Julien Behal

The company’s advertising revenue for the third quarter totalled $650m, up 29pc on the previous year.

‘Advertisers are choosing Twitter to reach the most valuable audience when they are most receptive’
– NED SEGAL

It reported that total ad engagements were up 50pc year over year while cost per engagement decreased 14pc year over year.

Data licensing and other revenue totalled $108m – an increase of 25pc year over year.

US revenue totalled $423m, an increase of 28pc year over year, while international revenue totalled $335m, an increase of 30pc year over year.

“Our third-quarter results reflect our success with advertisers, delivering revenue growth of 29pc and better-than-expected growth across most products and geographies,” said Ned Segal, Twitter CFO.

“We are demonstrating Twitter’s unique value proposition for advertisers through innovative ad formats, better relevance and continued improvement in ROI (return on investment). Advertisers are choosing Twitter to reach the most valuable audience when they are most receptive.”

Third-quarter earnings before interest, depreciation, taxes and amortisation (EBIDTA) came in at $295m, up from $207m the previous year.

Looking ahead to the fourth quarter, the company said it expects to report EBITDA of between $320m and $340m.

Twitter user. Image: Andrew Lozovyi/Depositphotos

Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com