Twitter Third-Quarter Earnings and Revenue Beat Expectations

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The social media company, led by CEO Jack Dorsey, faces rivals Snapchat and Facebook in the war for online advertising.

Twitter's stock was trading up more than 10 percent ahead of the market opening on Thursday following a third-quarter earnings report that beat analysts' expectations.  

The San Francisco-based social media company, led by CEO Jack Dorsey, reported adjusted earnings of 10 cents per share on revenue of $590 million, beating an analyst forecast of $586.7 million. Analysts expected Twitter, the 140-character messaging service often used by President Donald Trump, to report 6 cents per share in adjusted earnings, which the company beat by 4 cents.

Revenue of $590 million represented a decline of 4 percent year-over-year but growth of 3 percent from the previous quarter. Meanwhile, Twitter, which has made a return to profitability a goal, reported a net loss of $21 million, its lowest in several quarters. 

Twitter saw its daily active user (DAU) growth, a key metric for any social media company, rise by 14 percent. The social messaging app has been trying to improve its user experience and keep people more engaged. To that end, the social media giant is also testing doubling its character limit from 140 characters to 280 characters, a move meant to explore whether people are able to better express themselves on the platform when they aren't limited by space.

The company's number of total monthly users, at 330 million for the quarter, returned to growth after shrinking in the fourth quarter. Analysts had forecast 330.4 million monthly active users. But that 330 million figure included an adjustment, down by 1 million-2 million users per quarter, based on the inclusion of a third-party app that should not have been factored into the MAU number. Twitter says DAUs were not impacted by that adjustment.

On a call with investors, Twitter revealed that 2 million new users come to the platform each day, two-thirds of whom haven't been active in the last 30 days and one-third of whom are brand-new to the platform.

Twitter says that it has broadcast more than 830 live events. In the third quarter alone, it signed 30 live-streaming deals."Our live-streaming strategy is about leveraging a strength that existed on Twitter for the last decade," COO Anthony Noto said during a call with investors. Dorsey, responding to a question about how Twitter is thinking about all this video, noted that the goal is "adding more personalization across the board to Twitter" to help surface the right videos to users at the right time.

Stock in Twitter rose $1.76, or over 10 percent, to $18.89 in pre-market trading.

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