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Twitter Q3 Profit Misses Estimates; Shares Plunge Nearly 20%

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Twitter, Inc. (TWTR) reported third-quarter non-GAAP net income per share of $0.17 compared to $0.21, a year ago. On average, 25 analysts polled by Thomson Reuters expected the company to report profit per share of $0.20, for the quarter. Analysts' estimates typically exclude special items. Adjusted net income per share was $0.05 compared to $0.14, prior year. Shares of Twitter, Inc. were down more than 20 percent in pre-market trade on Thursday.

Third-quarter monetizable DAU (mDAU) was up 17 percent year-over-year, driven by ongoing product improvements. Average monetizable daily active usage (mDAU) was 145 million, compared to 124 million in the same period of the previous year and compared to 139 million in the previous quarter. Revenue growth was 9 percent, impacted by revenue product issues, along with greater-than-expected seasonality.

"We're continuing to improve relevance while testing ways to make it easier for people to find what they are looking for on Twitter," said Jack Dorsey, Twitter's CEO.

Third-quarter revenue totaled $824 million, an increase of 9 percent year-over-year. Analysts expected revenue of $874.03 million, for the quarter. Advertising revenue totaled $702 million, an increase of 8 percent from last year. Costs and expenses totaled $780 million, an increase of 17 percent year-over-year, resulting in operating income of $44 million and 5 percent operating margin.

For the fourth quarter, the company expects: total revenue to be between $940 million and $1.01 billion; and operating income to be between $130 million and $170 million. Analysts expect the company to report revenue of $1.06 billion.

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