Due to a combination of ad product “issues” and “headwinds,” Twitter’s third-quarter earnings failed to meet analysts’ expectations, on Thursday.
Not a complete disaster, the tech staple reported quarterly revenue of $824 million, which was up nearly 10% year-over-year, along with a 17% increase in monetizable daily active users (mDAUs).
Stateside, average mDAUs reached 30 million, while average international mDAUs grew to 115 million, during the period.
Yet, Twitter executives conceded that quarterly performance was impacted by revenue product issues and “greater-than-expected seasonality,” which, in their estimation, reduced year-over-year growth by at least 3 percentage points.
“More work remains to deliver improved revenue products,” Ned Segal, Twitter’s CFO acknowledged on Thursday.
For the quarter ending September 30, Twitter’s ad revenue totaled $702 million, which was up 8% year-over-year. During the same period, total ad engagements increased 23%, while cost per engagement decreased by 12%.
For his part, Twitter CEO Jack Dorsey said he was proud of the progress the company is making to clean up its platform.
“We also continue to make progress on health, improving our ability to proactively identify and remove abusive content, with more than 50% of the tweets removed for abusive content [during the quarter] taken down without a bystander or first person report,” Dorsey stated.
Looking ahead, Twitter executives said they expected its issues to continue to weigh on the overall performance of its ad business “in the near term.”
Specifically, they expect that “moderated performance” in Twitter’s Mobile Application Promotion (MAP) product and issues with the platform’s personalization and data settings will result in at least a four-point reduction in fourth-quarter growth.
Some analysts saw Twitter’s troubles on the horizon.
Earlier this month, Pivotal Research analyst Michael Levine said the firm was cutting Twitter’s earnings estimates (before interest, tax, depreciation and amortization) for 2020 by 7%.
“We believe the elimination of ad formats may have had a bigger impact than we had initially expected,” Levine said in a research note.