Twitter Q3 Results Top Estimates; Stock Up

(RTTNews) - Twitter Inc. (TWTR) reported a narrower loss in the third quarter 2017, while quarterly revenue declined about 4 percent from the prior year. Both adjusted earnings per share and revenues topped analysts' expectations.

"This quarter we made progress in three key areas of our business: we grew our audience and engagement, made progress on a return to revenue growth, and achieved record profitability," said Jack Dorsey, Twitter's CEO.

In the Thursday pre-market trade, TWTR is trading at $19.04, up $1.89 or 11.02%.

Average monthly active usage or MAU was 330 million for the third-quarter, up 4% year-over-year and compared to 326 million in the previous quarter. Average Daily active usage or DAU grew 14% year-over-year, an increase from 12% year-over-year growth in the prior quarter and marking the fourth consecutive quarter of double-digit growth.

For the fourth quarter, the company expects adjusted EBITDA to be between $220 million and $240 million, adjusted EBITDA margin to be between 35% and 36%, capital expenditures to be no more than $110 million. The company also expects that at the high end of adjusted EBITDA range, it will likely be GAAP profitable.

Net loss for its third quarter 2017 narrowed to $21.10 million or $0.03 per share from $102.87 million or $0.15 per share in the same quarter last year.

Total GAAP expenses in third-quarter declined 16% year-over-year to $582 million, reflecting in part stock-based compensation (SBC) expense, which declined for the fifth consecutive quarter, to $101 million, a decrease of 36% year-over-year.

"We're pleased with the improvements made toward a return to revenue growth this quarter. Our momentum was driven by improved execution from our sales team, strength in video and direct response ad formats, as well as in our data business, where we saw our third consecutive quarter of accelerating year-over-year growth," said Ned Segal, Twitter's CFO. Quarterly non-GAAP net income was $77.85 million, or $0.10 per share, compared to $61.39 million, or $0.09 per share in the prior year. Analysts polled by Thomson Reuters expected the company to report earnings of $0.07 per share for the third-quarter. Analysts' estimates typically exclude special items.

Adjusted EBITDA was $207 million or 35% of total revenue, compared to $181 million or 29% of total revenue in the same period last year.

Revenue for the quarter declined about 4% to $589.63 million from $615.93 million last year. Wall Street expected revenues of $586.73 million for the quarter. Total advertising revenue was $503 million, a decrease of 8% year-over-year.