Twitter's third quarter revenue and profit were hit in Q3, as a result of advertising problems including product bugs and low demand over the summer.
The company's total revenue was $824 million in Q3, an increase of 9%. Twitter said that performance was impacted by revenue product issues and greater-than-expected seasonality. In Q3 Twitter discovered, and took steps to remediate, bugs that primarily affected its legacy Mobile Application Promotion (MAP) product, impacting Twitter's ability to target ads and share data with measurement and ad partners.The company also discovered that certain personalization and data settings were not operating as expected. Twitter also experienced greater-than-expected seasonality in its advertising business that began in July and continued into August. "We believe our core value propositions of launching something new and connecting with what’s happening on Twitter continue to resonate very strongly with advertisers, and that slower business over the summer was due to a relatively lighter slate of big events and launches in July and August compared to 2018," Twitter said.
On the other hand, year-over-year ad revenue growth rebounded to double digits globally in September, with the most pronounced recovery in the US.
User growth provided a positive note for Twitter, which has historically struggled to increase its audience despite widespread social and cultural awareness. The company added 6 million new daily active users to 145 million in the third quarter, a 17% increase from a year earlier and a 4% gain from the previous quarter.
Twitter has stopped disclosing its monthly active users count, instead reporting mDAU, a metric it created to measure users exposed on a daily basis to advertising through the site or Twitter applications that are able to show ads.
Twitter’s Chief Executive Officer Jack Dorsey said the growth in monetizable daily active usage (mDAU) was driven by product improvements, including making the site easier to navigate and more proactively identifying abusive content for removal.
The company’s average mDAU hit 145 million.
Third-quarter net income was $37 million. In the same period last year, the firm reported net income of $789 million.
Twitte's total headcount at the end of Q3 was more than 4,600 employees, up 21%. The company now expects full fiscal year-over-year headcount growth in 2019 to be slightly above 20%.
For the fourth quarter, Twitter expects total revenue to be between $940 million and $1.01 billion.
Recently, the company made 6-second video bidding available for global advertisers and it has continued to expand its live and on-demand video partnerships.
Total operating expenses, including cost of revenue, rose by 17% year-over-year to $780 million, partly due to plans to hire more employees.
The company expects fourth-quarter operating income to be between $130 million and $170 million.