Twitter fell short of its revenue expectations in the third quarter, with the company pointing to product issues and advertising headwinds.
Revenue for the social media platform was US$824 million, up by 9% year-on-year. Meanwhile, advertising revenue was up by 8% at US$702 million.
The company said it encountered multiple “unexpected headwinds” in its ad business, including greater than expected ad seasonality in July and August.
“Slower business over the summer was in part due to a relatively lighter slate of big events and launches in July and August compared to 2018. One example of this is comparing the Men's World Cup in 2018 with the Women's World Cup in 2019,” Segal says,” says CFO Ned Segal.
“We were pleased ad revenue growth rebounded to double-digits globally in September, with the most pronounced recovery in the United States. Advertiser sentiment remains strong.”
Another key issue for the company was bugs in its Mobile Application Promotion (MAP) product.
New users’ device settings were accessed for targeted ads by Twitter even if users didn’t give permission. After the error was identified, Twitter turned off the setting entirely, limiting its ability to target people with ads.
Twitter also asks people to share data with measurement partners for advertisers to view the effectiveness of their campaigns. However, this data was also shared even if users denied access, forcing Twitter to also turn the setting off.
The social media platform says these bugs reduced its year-on-year growth by at least three points and expects them to continue to impact revenue for the fourth quarter.
Twitter stock has fallen 20% following the release of its third quarter results.
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