Twitter loses 9m users, but grows ad revenue 29% in Q3

Twitter’s reported a surge of 17% with a revenue of $758m in the Q3 2018, but also saw a decline of nine million users.

Twitter revenue was up 29% Year-To-Year. Ad revenue topped $650 million.

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

“Our third quarter results reflect our success with advertisers, delivering revenue growth of 29 percent and better than expected growth across most products and geographies,” said Ned Segal, Twitter’s CFO. “We are demonstrating Twitter’s unique value proposition for advertisers through innovative ad formats, better relevance and continued improvement in ROI. Advertisers are choosing Twitter to reach the most valuable audience when they are most receptive.”

Third Quarter 2018 Operational and Financial Highlights

• Q3 revenue totaled $758 million, an increase of 29% year-over-year, or an increase of 30% year-over-year when excluding the approximately $7 million of revenue in Q3’17 (its final quarter with reported revenue) from our fully-deprecated TellApart product.
• Advertising revenue totaled $650 million, an increase of 29% year-over-year.
• Total ad engagements increased 50% year-over-year.
• Cost per engagement (CPE) decreased 14% year-over-year.
• Data licensing and other revenue totaled $108 million, an increase of 25% year-over-year.
• US revenue totaled $423 million, an increase of 28% year-over-year.
• International revenue totaled $335 million, an increase of 30% year-over-year.
• Q3 GAAP costs and expenses totaled $666 million, an increase of 14% year-over-year.
• Q3 non-GAAP costs and expenses totaled $570 million, an increase of 22% year-over-year.
• Q3 GAAP net income was $789 million, compared to a net loss of $21 million in the previous year, representing a GAAP net margin of 104% and GAAP diluted EPS of $1.02. Excluding the release of deferred tax asset valuation allowances of $683 million, we generated Q3 net income of $106 million, net margin of 14%, and diluted EPS of $0.14.
• Q3 non-GAAP net income was $163 million compared to $78 million in the same period of the previous year, representing a non-GAAP net margin of 21% and non-GAAP diluted EPS of $0.21.
• Q3 adjusted EBITDA was $295 million compared to $207 million in the same period of the previous year, representing an adjusted EBITDA margin of 39%.
• Average daily active users (DAU) increased 9% year-over-year, compared to 14% in the same period of the previous year and compared to 11% in the previous quarter.
• Average monthly active users (MAU) were 326 million for Q3, compared to 330 million in the same period of the previous year and compared to 335 million in the previous quarter, impacted by a number of factors including: GDPR, decisions we have made to prioritize the health of the platform and not move to paid SMS carrier relationships in certain markets, as well as a product change that reduced automated usage and a technical issue that temporarily reduced the number of notifications sent.
• Average US MAUs were 67 million for Q3, compared to 69 million in the same period of the previous year and compared to 68 million in the previous quarter.
• Average international MAUs were 259 million for Q3, compared to 260 million in the same period of the previous year and compared to 267 million in the previous quarter.

SOURCE: Twitter Q3 Earnings Call, Twitter News Release