During the third quarter of 2020, Twitter added roughly 1 million users to the 186 million recorded at the beginning of the quarter.
The company reported a total daily audience of 187 million for Q3. It also reported a net income of $29 million, down from $37 million reported for the same quarter last year.
Despite its wavering audience, the social media company boosted its bottom line and grew revenue to $936 million in third quarter, surpassing analyst predictions. The revenue growth was driven mostly by ad revenue which was up 15%.
“Advertisers significantly increased their investment on Twitter in Q3, engaging our larger audience around the return of events as well as increased and previously delayed product launches, driving revenue to $936 million, up 14% year over year,” Twitter CFO Ned Segal said in a statement. “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.”
Twitter enjoyed a strong second quarter, at least from Wall Street’s standpoint, as the company’s share price surged 34% since mid-July. The jump was spurred on by Twitter adding a company-record 20 million new users during Q2. CEO Jack Dorsey said the user growth was due in large part to “continued shelter-in-place requirements for many people, and increased global conversation around the COVID-19 pandemic and other current events.”
Entering Thursday, Twitter’s stock was trading north of $50 per share — heights the company hasn’t reached since April 2015.
Much of the company’s Q3 headlines stemmed from the work it was doing around next week’s presidential election. Twitter has rolled out several updates in recent months that it hopes will curb election misinformation; for example, Twitter will add warning labels to tweets from politicians claiming election wins before results have been confirmed by state and federal officials. Those efforts have also drawn criticism in recent weeks from lawmakers and regulators, however, after Twitter blocked users from sharing a “potentially harmful” New York Post report on Hunter Biden, son of Democratic nominee Joe Biden.
Soon after, FCC Chairman Ajit Pai said the commission will be examining Section 230 of the Communications Decency Act of 1996, the broad legal shield that that gives tech companies like Facebook and Twitter the ability to censor or moderate content. That could end up being a major issue for Twitter down the line.
Twitter also looked to weed out more misinformation around COVID-19 during Q3. This initiative led to a run-in with President Trump in August, when Twitter ordered he delete a clip claiming kids were “virtually immune” from the virus.
Twitter was skeptical and cautious about its outlook for the fourth quarter, attributing the uncertainty in part to the upcoming Nov. 3 election. “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,” Twitter said in an earnings statement. “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.”