Twitter Rallies On Q3 Beat; Analyst Says Investors Are Giving Company Time To Stabilize User Base
Twitter Inc (NYSE:TWTR) reported a top-and-bottom-line beat in the third quarter Thursday morning.
For example, revenue came in 8 percent ahead of the Street's estimate and rose 29 percent from a year ago to $758 million. Much of the incremental revenue flowed through to the bottom line, where EPS rose from 10 cents a year ago to 21 cents and beat estimates of 14 cents per share.
Twitter's MAU decline in the quarter from 335 million last quarter to 326 million is attributable by Twitter's management team to Europe's GDPR along with a decision to "prioritize the health of the platform," Egbert said.
This appears to be a one-time event and mostly impacted accounts that weren't monetized in the first place, the analyst said.
"Investors are buying into the fact that these health issues for the platform are important to the future viability of it," Egbert said. "Right now, [investors] seem a little bit more focused on the business."
Investors appear willing to give Twitter a few quarters to stabilize its MAU before losing patience, the analyst said.
Twitter guided its fourth-quarter adjusted EBITDA to a range of $320 million to $340 million and an adjusted EBITDA margin of 39-40 percent.
Twitter shares were trading up 16.3 percent at $32.03 at the time of publication Thursday.
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