Twitter avoids revenue hit from Apple privacy changes

Social network also missed user growth projections for quarter

A screen shows the price of Twitter stock at the New York Stock Exchange in 2019. The social networking site has been working to add new features such as audio chat rooms to attract users. AP

Twitter on Tuesday reported quarterly results that avoided the brunt of Apple privacy changes on advertising that hobbled its rivals, sending its shares up 3 per cent.

The social networking site has been working to add new features such as audio chat rooms to attract users and also rolled out improvements to its advertising capabilities to reach its goal of doubling annual revenue by 2023.

Advertising revenue was $1.14 billion during the quarter ended September 30, in line with consensus estimates.

The company said it saw a “modest” impact to advertising revenue due to privacy changes Apple enacted, which prevent advertisers from tracking users on their devices without their consent.

Investors had expected Twitter would be relatively shielded from being hurt by the changes, because most of its advertisers do not rely on highly targeted advertisements.

The company's tech peers Snap and Facebook said the Apple changes hurt their ability to target and measure digital advertisements, citing the updates as the reason why the companies fell short of revenue expectations.

Twitter said monetisable daily active users, its term for users who are served advertisements, was 211 million during the third quarter, missing analyst estimates of 212.6 million, IBES data from Refinitiv showed.

While Twitter increased its number of users outside the US by five million from the previous quarter, its US base remained flat.

Total revenue, which also includes money that Twitter earns from data licensing, was $1.28bn, also in line with Wall Street targets.

The company said its costs this year from hiring and investing in a new data centre will flow into next year, resulting in a mid-20 per cent increase in total costs for 2022.

The company forecast fourth quarter revenue between $1.5bn to $1.6bn.

Twitter previously announced it would sell its advertising technology unit MoPub and the deal is expected to close in the first quarter of 2022.

The company said it does not expect to be able to recoup the revenue loss next year from selling MoPub, estimated between $200 million to $250m, though it added the sale does not affect Twitter's goal of doubling annual revenue by 2023.