Twitter has announced Q3 2019 revenues of $824 million — a year-on-year (YoY) increase of around 9% on the $758 million the social network reported for the same period last year, but down around 2% from the $841 million for the previous quarter. The company reported earnings per share (EPS) of $0.17, compared to the expected $0.20.
During its last earnings announcement, Twitter reported higher-than-usual domestic growth, with its U.S. revenue climbing 24%, compared to 12% for its international income. This time around, Twitter’s U.S. revenue increased by a more modest 10% versus the 7% for its non-U.S. income.
During the previous quarter’s earnings, Twitter estimated that its Q3 revenue would fall somewhere between $815 million and $875 million, and in the build-up to today’s announcement the consensus estimate had the figure pegged at the top end of that scale, so today’s news won’t be welcomed by Wall Street. Twitter shares had seen something of a resurgence in recent times, hitting a 12-month high of $45 last month, its second-highest peak since 2015. However, in the wake of today’s missed revenue target, the company’s shares dropped more than 20% in premarket trading.
Twitter explained that part of its revenue miss was due to a bug it found in its legacy Mobile App Promotion (MAP) product, an ad tool that allows developers to promote their apps through Twitter. The company said this bug impacted its ability to target ads and share data with its ad partners. Additionally, it said that certain “personalization and data settings” were not working properly. Twitter estimated that these issues together affected its YoY revenue growth by at least 3 percentage points.
Twitter has made a number of tweaks to its platform over the past quarter, including a controversial “hide replies” feature that allows tweet authors to curate responses to their tweets. This feeds into a broader push from Twitter and other social networks looking to clean up their platforms and make them less toxic — in theory, this should encourage more people to use their services. And this is what Twitter is looking to highlight in its Q3 report: Short-term revenue misses aren’t as important as building an app that people want to use long into the future.
“Despite its challenges, this quarter validates our strategy of investing to drive long-term growth,” said Twitter CFO Ned Segal. “More work remains to deliver improved revenue products. We’ll continue to prioritize our ad products, along with health and our investments to drive ongoing growth in mDAU. We remain confident that focusing on our most important priorities and delivering higher-performing, better ad formats will deliver better outcomes for all of our stakeholders for years to come.”