Twitter Third-Quarter Earnings Beat Expectations, User Numbers Drop

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Twitter CEO Jack Dorsey

The social media giant lost another 9 million monthly active users, but better-than-expected earnings figures sent its stock up 13 percent in pre-market trading.

Twitter on Thursday unveiled a third-quarter earnings report that beat analysts' expectations. 

The social media giant posted adjusted earnings of 21 cents per share, compared to adjusted earnings of 10 cents per share in the year-ago period.

That beat missed an analyst forecast of 14 cents a share in earnings for the latest financial quarter.

The San Francisco-based social media company also posted overall revenues rising of $758 million, which blew past an analyst forecast of $701 million.

The company's third-quarter ad sales, which comprise the bulk of Twitter's overall revenues, were $650 million, beating an analyst estimate of $593 million. Twitter said total ad engagements increased 50 percent year-over-year.

The latest revenue line also follows an earlier three consecutive quarters of revenue growth.

But Twitter's number of total monthly users, at 326 million for the quarter, was down 9 million during the latest three-month period. That also fell short of an analyst forecast of 330 million monthly active users.

"We're achieving meaningful progress in our efforts to make Twitter a healthier and valuable everyday service," said Jack Dorsey, Twitter's CEO, in a statement. "We're doing a better job detecting and removing spammy and suspicious accounts at sign-up."

Twitter saw its daily active user (DAU) growth, a key metric for any social media company, rise by 9 percent.

The social messaging app has been trying to improve its user experience and keep people more engaged.

On an analyst call following the release of his latest financial results, Dorsey focused on efforts to remove bogus accounts to improve the quality of conversations on his social media platform.

“There’s a lot of appreciation for our focus. And that’s certainly our superpower of conversation, but also the focus on health and increasing health in the public conversation," he told investors.

Twitter CFO Ned Segal said improving the safety and security of the social media platform remained his company's biggest check box. "Health continues to be our number one priority, followed by audience, revenue product and sales," he told investors.

Segal also underlined success from efforts to improve advertising products and engagements. "The U.S. was a big driver, the business there turned faster than we expected during the quarter ... We feel really good about the momentum that we have going into the strong fourth quarter," he reported.

Stock in Twitter jumped by $3.48, or around 13 percent, to $30.90 in pre-market trading.

Oct. 25, 10 a.m. Updated with comments by senior Twitter execs made during an analyst call.