Twitter’s 3rd quarter revenue rises 37%

But lawsuit settlement creates loss of $537 million over last year

Twitter said Tuesday that its revenue for the third quarter rose 37% from a year ago to $1.28 billion, adding that it had largely sidestepped the effects from the privacy changes that Apple has enacted, which have hurt mobile advertising.

But the social media company swung to a loss of $537 million from a profit of $29 million a year earlier, after it paid $809.5 million to settle a 2016 shareholder lawsuit that accused it of misleading investors about user metrics.

In a letter to shareholders, Twitter said that the fallout of Apple’s changes on its business were less severe than for other companies. This year, Apple released App Tracking Transparency, a pop-up window in iPhone apps that gives people the choice to not be tracked across apps and websites. The move has disrupted companies that relied on the tracking to collect information about users so they could better target ads.

Last week, Snap said in an earnings call that Apple’s changes had caused its revenue to grow more slowly than anticipated. Facebook also said this week that it was retooling some of its advertising systems because of the changes.

But Twitter said the effects of Apple’s changes were more benign for it, because its advertisers generally use it for brand awareness campaigns, which rely less on tracking, rather than direct response campaigns that more closely track users.

“It is still too early for Twitter to assess the long-term impact of Apple’s privacy-related iOS changes,” but the revenue impact for the third quarter was lower than expected, Twitter said.

Twitter said its daily active users who saw ads grew 13% in the third quarter to 211 million. Most of that growth came from outside the United States, the company added.

Twitter said its sale of MoPub, a platform for selling mobile advertising, to mobile advertising company AppLovin would conclude in the first quarter of 2022 and that it expected to lose some advertising revenue as a result. But the company added that it was still on track to meet its goal of earning $7.5 billion or more of annual revenue in 2023.

“We continued to drive increased value for our advertisers thanks to revenue product innovation, including progress on our brand and direct response offerings, strong sales execution and a broad increase in advertiser demand,” Ned Segal, Twitter’s chief financial officer, said in a statement.