Twitter beat analyst expectations on its third quarter earnings, reporting a 14% rise in total revenue to $US936 million.
Average monetisable daily active usage (mDAU) grew 29% to 187 Million.
CFO Ned Segal says advertisers significantly increased investment in the September quarter, engaging a larger audience around the return of events as well as increased and previously delayed product launches.
“We also made progress on our brand and direct response products, with updated ad formats, improved measurement, and better prediction," he says.
"We remain confident that our larger audience, coupled with ongoing revenue product improvements, new events and product launches, and the positive advertiser response to the choices we’ve made as we have grown the service, can drive great outcomes over time."
Advertising revenue was $US808 million, up 15%. Total ad engagements increased 27%. Cost per engagement (CPE) fell 9%.
eMarketer analyst Nazmul Islam described Twitter's revenue performance as "astonishing".
"The engagement on the platform continues to be a big positive for them not only driven by news surrounding current events but also due to their investments in new features like Topics which now has 70 million accounts following one," says Islam.
"Advertisers were waiting to spend on Twitter and they all came back to the platform with the return of live events.
"We expect Twitter to continue to be attractive for brand advertisers and they’re on the path to add more direct respond advertisers as well.”
Outlook
The company says: "As we approach the US election, however, it is hard to predict how advertiser behavior could change. In Q2, many brands slowed or paused spend in reaction to US civil unrest, only to increase spend relatively quickly thereafter in an effort to catch up. The period surrounding the US election is somewhat uncertain, but we have no reason to
believe that September’s revenue trends can't continue, or even improve, outside of the election-related window."
Twitter says the strength and timing of the holiday shopping season is likely to play out differently this year than it has historically, with a buying season that may be accelerated and even more digital than before.
Total worldwide digital ad spending is on track to reach $US339.71 billion by the end of 2020, according to eMarketer, up 4.8% from last year.
According to eMarketer's latest ad forecast (October 2020), Twitter's total worldwide ad revenue will reach $US2.42 billion by the end of 2020, down 6.6% over last year. Its share of total worldwide digital ad spending will drop slightly to 0.8%.
Twitter's worldwide mobile ad revenue is expected to decline by 5.6% to reach $US2.63 billion in 2020. Its share of the worldwide mobile ad market will slightly fall to 1.1%.
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