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Twitter Stock Rises As Q3 Results Beat Estimates

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Micro-blogging site Twitter Inc. (TWTR) on Thursday reported a turnaround to profit in the third quarter on strong revenue growth. Both revenue and adjusted earnings per share for the third quarter beat analysts' estimates. The company's shares are rising almost 13 percent in pre-market activity.

However, Twitter's average monthly active users or MAU figure declined from the preceding quarter as well as from the year-ago period.

"Our third quarter results reflect our success with advertisers, delivering revenue growth of 29 percent and better than expected growth across most products and geographies. We are demonstrating Twitter's unique value proposition for advertisers through innovative ad formats, better relevance and continued improvement in ROI," said Ned Segal, Twitter's CFO.

Twitter's third-quarter net income was $789.18 million or $1.02 per share, compared to net loss of $21.10 million or $0.03 per share in the year-ago period.

On an adjusted basis, earnings for the quarter were $162.72 million or $0.21 per share, compared to $77.85 million or $0.10 per share last year.

On average, 34 analysts polled by Thomson Reuters expected earnings of $0.14 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter increased 29 percent to $758.11 million from $589.63 million last year and beat analysts' consensus estimate of $702.57 million.

Revenue grew 30 percent year-over-year when excluding the approximately $7 million of revenue in the year-ago quarter from the company's fully-deprecated TellApart product. Advertising revenue rose 29 percent from last year to $650 million.

Twitter said its average monthly active users or MAU was 326 million in the quarter, down from 330 million in the year-ago period and also lower than 335 million in the preceding second quarter.

According to Twitter, MAU was impacted by several factors including GDPR, decisions made by the company to prioritize the health of the platform and not move to paid SMS carrier relationships in certain markets, as well as a product change that reduced automated usage and a technical issue that temporarily reduced the number of notifications sent.

Twitter's average daily active usage or DAU for the quarter grew 9 percent year-over-year, compared to 14 percent in the same period of the previous year and compared to 11 percent in the previous quarter.

Looking ahead to the fourth quarter, Twitter projects adjusted EBITDA between $320 million and $340 million.

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