Twitter stock shot up more than 10 percent in pre-market trading after reporting higher than expected earnings and revenue for the third quarter.
Twitter reported earnings before the bell on Thursday:
- Earnings per share: 21 cents (adjusted) vs. 14 cents, according to Refinitiv
- Revenue: $758 million vs $702.6 million, according to Refinitiv
- Monthly active users (MAUs): 326 million vs. 330.1 million, according to FactSet and StreetAccount
“We’re achieving meaningful progress in our efforts to make Twitter a healthier and valuable everyday service,” CEO Jack Dorsey said in an earnings release. “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.”
This is the second quarter in a row that Twitter missed monthly active user estimates. The company purged “locked-accounts” in an effort to get rid of bots and fake accounts on the platform in July. It had warned in last quarter’s earnings report that these actions could have a negative effect on MAUs. However, the decline in monthly active user numbers did not seem to affect shares.
In September, Twitter CEO Jack Dorsey testified alongside Facebook COO Sheryl Sandberg in front of the Senate Intelligence Committee regarding foreign meddling during the 2016 U.S. election. The company has also faced claims it participates in “shadow banning,” or making sure certain accounts don’t show up in search results. Twitter had strongly denied those reports. Dorsey did admit the company contributes to “filter bubbles,” where people only see opinions from one perspective, and vowed to fix that issue.
The company has recently purged a network of bots and other abusive accounts on its platform, including a suspected bot pro-Saudi government network and more accounts affiliated with Infowars founder and conspiracy theorist Alex Jones. Twitter also said it found more than 10 million posts that may have been backed by the Iranian and Russian governments, which it had previously said were sources of spreading misinformation.