Share price tumbles over Twitter bugs
Bugs in Twitter’s advertising technology dragged on revenue, overshadowing a surprisingly strong quarter of user growth.
The issue caught Wall Street off guard on Thursday and shares plunged 19 per cent, among the company’s largest single-day losses since going public six years ago.
The San Francisco company said it was addressing those issues, but that they would 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 from 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 per cent to 145 million compared with the same period last year, and increased by six million from just the previous quarter.
That is three 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 personalisation and data settings were not operating as expected. These issues were in our control and we will work to do better.’’
Net income was US$37 million (NZ$57.9m), 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 per cent drop from last year’s adjusted profit of US$106m.
Revenue was $824m, an increase of 9 per cent over the same period last year, but well short of Wall Street’s projections of US$874m.
Citi analyst Hao Yan said fixing bugs in the company’s ad platform would be a priority, but saw it as a
‘‘These bugs affected our ability to target ads and share data with measurement and ad partners. We also discovered that certain personalisation and data settings were not operating as expected.’’
Ned Segal, chief financial officer
drag on revenue at least in the near term.
Twitter started disclosing its daily user base earlier this year. These are users who log into the site at least once a day and see advertisements on the platform. Twitter said the daily metric was replacing its monthly user count, which it will no longer disclose.
The company said it has made progress on what it called the ‘‘health’’ of its platform. The microblogging service, which has been criticised in the past for not doing enough to combat abusive comments and users, said it had been proactively identifying and removing such content.
Chief executive Jack Dorsey said more than 50 per cent of the tweets removed for abusive content last quarter were taken down before they were reported.
Twitter now projects fourthquarter revenue of US$940m, the lower end of its previous guidance range and short of the US$1.1 billion analysts were looking for.
Advertising revenue came to US$702m for the quarter, an increase of 8 per cent over the third quarter last year.
The company said data licensing and other revenue totalled US$121m, an increase of 12 per cent over 2018’s third quarter. – AP