Twitter shares rose 16% in early morning trading as the company reported stronger-than expected results for its third quarter, even as its efforts to crack down on abuse of the platform cost it millions of monthly users.
The company reported adjusted earnings per share of 21 cents, well above Wall Street’s projections of 14 cents a share. Revenue totaled $758 million for the September quarter, an increase of 29% from a year ago. That also exceeded the consensus estimates of $702.57 million.
However, Twitter lost 9 million monthly active users from the prior quarter, as it continues to focus on the health of the platform. The company recently purged automated accounts, known as “bots,” and has been cracking down on abuse, including a network spreading pro-Saudi messages about the killing of Washington Post columnist Jamal Khashoggi.
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“We see health and safety as a growth-vector for the company long-term,” Twitter CEO Jack Dorsey said this morning, on a call with analysts. “We believe not only is this the right thing to do for the company, but it will lead to growth long-term.”
Dorsey said the company is being more transparent about what its seeing on the service, and working with governments around the world, including the U.S. government, to prevent abuse foreign actors from spreading misinformation on the platform ahead of the elections.
Just last week, it released a trove of data associated with foreign influence and misinformation campaigns on Twitter. It identified more than 10 million tweets and 2 million images tied to the Russian Internet Research Agency and to Iran, with activity dating back to 2009.
“We’ve released a number of accounts and information around foreign actors we saw on the platform, we released a week ago,” Dorsey said. “We haven’t seen more meaningful or greater activity since then. This is an ongoing concern that we continue to address.”
Twitter points to another metric, daily active users, as the best measure of the company’s performance. There, the company saw 9% growth, as compared with the prior year’s quarter, though that growth is decelerating.
Dorsey said the work Twitter is doing to ensure healthy conversation on the platform is having a short-term effect, as it cracks down on spammy and suspicious accounts. He noted the company is working on a variety of initiatives to eliminate the obstacles new users face, as they try to figure out who to follow, as a way to increase the number of daily users.
“We can do a much better job by understanding someone’s interests and matching them to the best conversations immediately,” Dorsey said. “That may be accounts or conversations.”
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