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Oct. 27, 2021, 8:13 a.m. EDT

Twitter adds users, sees revenue rise as it avoids being bogged down by Apple change

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By Levi Sumagaysay

Twitter Inc. said Tuesday that its monthly active users and revenue rose in the third quarter, and that the effect of Apple’s iOS privacy change on its ad business was “modest.”

Revenue rose in all markets to $1.28 billion from $936 million in the year-ago quarter, thanks to Olympics-related advertising and some economic recovery from the coronavirus pandemic, plus what Chief Executive Jack Dorsey said on the earnings call was “strong performance across products.”

Twitter /zigman2/quotes/203180645/composite TWTR +2.83% said average monetizable daily active users increased 13% year over year to 211 million, an addition of 5 million from the previous quarter. Analysts had expected 211.9 million.

Ad revenue climbed 41% higher to $1.14 billion, with the company saying it had prepared for the Apple /zigman2/quotes/202934861/composite AAPL +2.28% iOS change — which allows users to opt out of targeted ads — that weighed on the earnings of competitors like Facebook Inc. /zigman2/quotes/205064656/composite FB +2.40% and Snap Inc. /zigman2/quotes/205087158/composite SNAP +5.99% during the quarter.

“It is still too early for Twitter to assess the long-term impact of Apple’s privacy-related iOS changes, but the Q3 revenue impact was lower than expected, and we have incorporated an ongoing modest impact into our Q4 guidance,” the company wrote in a letter to shareholders, saying that it put mitigations in place and adopted new standards in preparation for the changes.

The microblogging company reported a third-quarter loss of $536.8 million, or 67 cents a share, compared with a profit of $28.7 million, or 4 cents a share, in the year-ago period, much of which it attributed to one-time $766 million charge related to a class-action settlement over allegations it misled investors about user growth. Adjusted for stock-based compensation and other costs, the company’s loss was 54 cents a share.

Analysts surveyed by FactSet had forecast earnings of 17 cents a share on revenue of $1.28 billion.

Twitter stock rose more than 3% after hours, after falling about 1% in the regular session to close at $61.43. 

The San Francisco-based company expects fourth-quarter revenue of between $1.5 billion and $1.6 billion, while analysts had forecast revenue of $1.59 billion. It also expects daily active users to grow at or above the 13% increase it saw in the third quarter.

“We feel like we’re entering the fourth quarter with the wind at our back,” said Twitter Chief Financial Officer Ned Segal during the company’s earnings call. Citing 20% revenue growth year over year in Japan, the company’s second-largest market, he added that “different economies are coming out of COVID at different times,” which means more upcoming opportunities for the company.

The company disclosed more details about its sale of MoPub, which it announced earlier this month. Twitter it will not recoup the full revenue loss of $200 million to $250 million from the sale in 2022. The deal, in which Twitter sold mobile-ad network MoPub to AppLovin for $1.05 billion, is expected to close in the first quarter. Segal said most MoPub employees will be staying at Twitter.

Shares of Twitter have risen more than 13% year to date, and are up nearly 20% in the past 52 weeks. By comparison, the S&P 500 Index /zigman2/quotes/210599714/realtime SPX +0.31% is up 21.8% so far this year, and has increased almost 35% in the 12 months.

/zigman2/quotes/203180645/composite
US : U.S.: NYSE
$ 45.72
+1.26 +2.83%
Volume: 18.39M
Dec. 8, 2021 4:02p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$35.55 billion
Rev. per Employee
$675,700
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/zigman2/quotes/202934861/composite
US : U.S.: Nasdaq
$ 175.08
+3.90 +2.28%
Volume: 116.78M
Dec. 8, 2021 4:00p
P/E Ratio
31.22
Dividend Yield
0.50%
Market Cap
$2808.45 billion
Rev. per Employee
$2.38M
loading...
/zigman2/quotes/205064656/composite
US : U.S.: Nasdaq
$ 330.56
+7.75 +2.40%
Volume: 19.91M
Dec. 8, 2021 4:00p
P/E Ratio
23.60
Dividend Yield
N/A
Market Cap
$897.98 billion
Rev. per Employee
$1.47M
loading...
/zigman2/quotes/205087158/composite
US : U.S.: NYSE
$ 53.42
+3.02 +5.99%
Volume: 26.74M
Dec. 8, 2021 4:01p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$81.13 billion
Rev. per Employee
$648,881
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
4,701.21
+14.46 +0.31%
Volume: 2.16B
Dec. 8, 2021 4:59p
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