You are currently viewing Twitter Says Its Revenue Growth Plunged Because Of ‘Bugs’

Twitter Says Its Revenue Growth Plunged Because Of ‘Bugs’

  • Post author:
  • Post category:Uncategorized
  • Post comments:0 Comments

Twitter shares plunged on Thursday after reporting glitches that impacted its ad-targeting ability, pulling down revenue growth in the past quarter.


Profit for the third quarter was $37 million. This was a sharp drop from last year when a large tax benefit helped the online messaging platform.


Twitter’s revenue growth rose nine percent from a year earlier to $824 million, well below analyst forecasts. It was impacted by what the company called “revenue product issues.”


Shares in Twitter slid 19 percent to $31.44 in morning trade on the disappointing results. Twitter said “bugs” hit its revenue, making it harder to deliver targeted advertising, as well as some seasonal factors.


“Unfortunately we had some missteps and bugs,” chief executive Jack Dorsey told a conference call. “These are issues we identified quickly and are working quick to fix.”


The issue affected the ability to deliver ads, which make up the bulk of revenue, according to the company.


“In Q3, we discovered, and took steps to remediate, bugs that primarily affected our legacy Mobile Application Promotion product, impacting our ability to target ads and share data with measurement and ad partners,” Twitter’s investor relations team tweeted.


“We also discovered that certain personalization and data settings were not operating as expected. We believe that, in aggregate, these issues reduced year-over-year revenue growth by 3 or more points in Q3.”


Chief financial officer Ned Segal said Twitter is working on a fix. However, the glitch may have a negative impact in the fourth quarter.


The bugs mainly affected Twitter operations outside the United States. There, ad revenue was up just five percent compared with 11 percent for the US.


Overall, advertising revenue totaled $702 million, up by eight percent from last year.




Challenges ahead

The results highlight challenges for Twitter. It has struggled to keep pace with rival social platforms. It also seeks to remove fake accounts, abusive content and manipulation efforts.


“The miss (on revenue) wasn’t just because of tough comparisons, which were expected to dampen their revenue growth, but issues with their ad product. That could impact their performance in the all-important Q4,” analyst Jasmine Enberg of eMarketer said.


Mark Vickery at Zacks Investment Research said the results could be worrisome for Twitter looking ahead.


“It will be up to investors to gauge whether these issues are a temporary glitch on Twitter’s road toward higher levels or whether they will provide a longer-term albatross around the company’s neck,” Vickery said in a research note.


Twitter boosted the number of “monetizable” daily active users, the new measurement used by the platform, by six million from the past quarter to 145 million.


The social platform stopped using a count of “monthly active users,” which was 330 million earlier this year. It did this in favour of the new measure of daily users on the mobile app or website who see ads in their feeds.


Twitter has a strong following among journalists, politicians and celebrities. However, it struggled to build a broader user base in the manner of rival social platforms such as Facebook.


Dorsey said the growth in users represents a “steady refinement of Twitter” as it works to improve the platform and weed out inappropriate content. “This is an incredibly strong foundation to build upon,” he said.


Dorsey said Twitter has improved its automated systems to remove unwanted content. It now takes down more than 50 percent “proactively” and “without a bystander or first-person report.”


Source: AFP

Leave a Reply