Twitter shares plunge as user growth slows

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Twitter had 187 million daily users, on average, in the third quarter, but below analysts’ expectations of 195.6 million.

Twitter posted much stronger than expected third-quarter results thanks to surging advertiser demand, however profit slipped and daily users came in lower than analysts expected.

That sent shares plunging 15% in after-hours trading. The stock had closed up $3.92, or 8.1%, at $52.43.

The San Francisco company earned $28.66 million, or 4 cents per share, in the July-September period. That’s down 22% from a year earlier, due to higher expenses in part related to COVID-19. Excluding one-time items, earnings were 19 cents per share.

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Revenue grew 14% to $936.2 million from $823.7 million.

Twitter had 187 million daily users, on average, in the third quarter, but below analysts’ expectations of 195.6 million. The company no longer discloses monthly user figures.

“We have grown our daily audience by 42 million in the last year as people all around the world come to Twitter to find out about the topics and events they care about most. I’m pleased mDAU grew 29% year over year to 187 million, driven by global conversation around current events and product improvements,” said Jack Dorsey, Twitter’s CEO.

Analysts were expecting a loss of 10 cents per share, adjusted earnings of 6 cents per share and revenue of $777.3 million, according to a poll by FactSet.

The company predicted uncertainty going forward, due in part to the upcoming U.S. election, and said it is “hard to predict how advertiser behavior could change.”

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