Web – Heavy loss for Twitter, but advertising resists better than elsewhere

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The social network had to pay a large sum to settle a dispute with its shareholders dating from 2015, which burdened its results for the third quarter.

Twitter is targeting $ 7.5 billion in revenue in 2023, which would double its revenue in 2020.

REUTERS

Twitter recorded a very heavy loss of $ 537 million in the third quarter, linked to an amicable settlement with aggrieved shareholders, but saw an increase in its advertising revenue when other players in the sector have suffered. The social network announced, at the end of September, the payment of 809.5 million dollars to settle a dispute which concerned the communication of the company in early 2015, deemed misleading by several shareholders, at the origin of a legal action .

Several months had passed before Twitter delivered a picture more consistent with its real activity. In the meantime, executives of the group had sold for $ 281 million of Twitter shares, at prices that did not reflect, according to shareholders, the situation of the group. The deal resulted in a one-off charge of $ 766 million included in this quarter’s accounts, which plunged earnings into the red, with an adjusted loss of 54 cents per share, when the market expected a profit of 17 cents. However, despite this air gap, investors welcomed these results, the title taking 2.88% in electronic exchanges after the close of Wall Street.

Strong sales

The group with the blue bird has indeed recorded a turnover in line with expectations, at 1.28 billion dollars, with advertising revenues up 41% over one year and even 8.5% of a quarter over another. “It’s better than many expected,” commented Scott Kessler, analyst at research firm Third Bridge. Twitter is doing well this quarter when other social networks, primarily Facebook, suffered from the effects of an update to the iPhone operating system.

Apple’s new rule

Version 14.5 of iOS now asks the user whether or not they want to allow an application downloaded on the iPhone to follow its online journey outside of the app. If he refuses, the app can no longer collect data when the user goes to other sites and apps, which has been the case until now. As a result of these changes, many of the tools previously used by advertisers to measure the effectiveness of their social media advertising campaigns are no longer effective.

Hit hard by this headwind, Facebook recorded a 1% drop in advertising revenue in the third quarter, while it was up 56% year-on-year between the second quarter of 2020 and the same period. from 2021.

Twitter is confident

“It is too early to assess the long-term impact of (iOS) changes, but the effect on our Q3 revenue is less than we expected,” commented Ned Segal, CFO Twitter, during the conference call to present the results. The group has, moreover, integrated only a “modest impact” of the new iOS in the fourth quarter, added the leader.

Over the quarter, Twitter saw the number of daily users said to be “monetizable”, that is to say who are exposed to advertisements on the platform, increase from 206 to 211 million. The group continues to target revenue of $ 7.5 billion in 2023, which would double its revenue for 2020.

(AFP)