Twitter Shares went down by 16% on Thursday after the announcement from the company that the expenses would accelerate in the fourth quarter, and the company added fewer users then expectation from Wall Street. The social media company said that the expenses can reach 20% in the fourth quarter.Also, the company warned that it is hard to predict the reactions from the advertiser as presidential elections are very close now. In aftermarket trading on Thursday, shares went down to $44.00.
Twitter predicts that companies can pause ad spending due to presidential election outcomes same as the companies did in the 2nd quarter after the death of George Floyd in May.
Twitter also revealed that the figures for active users went down from 195.2 million to 187 million monetizable daily active users. In the previous quarter, monetizable daily active users were 186 million. The company still beat all the estimates about total revenue growth in the third quarter ended September 30, 2020. The company made $936 million during the last reported quarter.
Twitter Chief Financial Officer Ned Segal explained that the growth was backed by the improved advertising methods, improved ad lengths, and return of the events which were delayed due to pandemic. The company is expecting more revenue growth outside the presidential election in the current quarter. The revenue from Ad increases 15% to $808 million beating all the estimates of $645.95 million.
The company is working on new mobile
phone data privacy requirements and will not launch new advertising product
until 2021. The company cost and expenses reached up to $880 million with a 13%
increase, due to more spending on infrastructure. The Company announced net
income of 4 cents per share in the third quarter or $28.66 milliondown from
$36.5 million, or 5 cents per share in the same quarter last year.