Yahoo Finance Twitter smashes expectations, announces job cuts
Twitter (TWTR) shares are surging after the company reported better-than-expected performance in the third quarter.
Q3 revenue came in at $615.9 million, beating the estimates for $605 million. Earnings adjusted for nonrecurring items came in at $0.13 per share, smashing expectations for $0.09.
Importantly, Twitter reported 317 million monthly active users (MAU) during the period, which was up from 313 million in Q2 and stronger than the 315 million analysts were looking for. This was up 3% year-over-year.
Mobile MAUs represented 83% of total MAUs.
Average daily active users grew 7% year-over-year.
“We see a significant opportunity to increase growth as we continue to improve the core service,” Twitter CEO Jack Dorsey said. “We have a clear plan, and we’re making the necessary changes to ensure Twitter is positioned for long-term growth. The key drivers of future revenue growth are trending positive, and we remain confident in Twitter’s future.”
Management announced that in its efforts to streamline the organization that it would be cutting up to 9% of its workforce. This is expected to primarily affect people in Twitter’s sales, marketing, and partnerships divisions.
“We intend to fully invest in our highest priorities and are de-prioritizing certain initiatives and simplifying how we operate in other areas,” CFO Anthony Noto said. “Over time, we will look to invest in additional areas, as justified by expected returns and business results. In addition, our live strategy is showing great progress. We’ve received very positive feedback from partners, advertisers and people using the service, and we’re pleased with the strong audience and engagement results.”
The stock is up around 5% in premarket trading.
Twitter has not been without its challenges. Some of the big ones include growing its audience and monetizing its product.
But where some see problems, Twitter sees opportunity.
“While our efforts are beginning to drive growth in audience and engagement, we believe there is still signi cant opportunity ahead,” management said. “To get a better sense of the size of this opportunity: consider that each day there are millions of people that come to Twitter to sign up for a new account or reactivate an existing account that has not been active in the last 30 days.”
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Sam Ro is managing editor at Yahoo Finance.
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