Ad-tech problems, weak revenue eclipse Twitter user growth
SAN FRANCISCO (AP) — Bugs in Twitter's advertising technology dragged on revenue, overshadowing a surprisingly strong quarter of user growth.
The issue caught Wall Street off guard Thursday and shares plunged 19%, among the company's largest single-day losses since going public six years ago.
The San Francisco company said it's addressing those issues, but that they will likely weigh on its advertising business in the near term. It lowered its outlook for the fourth-quarter and for the year.
The problems shifted the attention of industry analysts away positive trends in usage on Twitter, which would typically imply strong revenue growth ahead.
The number of people using Twitter daily in the most recent quarter jumped 17% to 145 million compared with the same period last year, and increased by 6 million from just the previous quarter.
That is 3 million more users than industry analysts had expected, according to a survey by FactSet.
"These bugs affected our ability to target ads and share data with measurement and ad partners," said Ned Segal, chief financial officer. "We also discovered that certain personalization and data settings were not operating as expected. These issues were in our control and we will work to do better."
Net income was $37 million, or 5 cents per share. Removing non-recurring charges, per-share profit was 17 cents, 3 cents shy of Wall Street expectations, according to a survey of industry analysts by FactSet.
It was a 65% drop from last year's adjusted profit of $106 million.
Revenue was $824 million, an increase of 9% over the same period last year, but well short of Wall Street's projections of $874 million.
Citi analyst Hao Yan said fixing bugs in the company's ad platform will be a priority, but sees it as a drag on revenue at least in...