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Twitter reports Q3 earnings

Twitter reported Q3 earnings on Thursday, surpassing analyst expectations, but coming in under in user growth. The Final Round breaks down the numbers.

Video Transcript

[ALARM RINGING]

SEANA SMITH: Welcome back to "The Final Round." It has been quite an eventful past 15 minutes here when we take a look at the earnings reports that we've gotten from Facebook, that we've gotten from Alphabet, Amazon-- Twitter we're going to get to in a second. Apple is coming up here in just around 10 minutes from now. So stay with us.

Of course, we have a lot more breaking news ahead. But let's get to those Twitter results that we haven't gotten to yet. Shares down almost 10% here after hours. Jen Rogers has more on that for us. Jen.

JEN ROGERS: Yep, Seana, we are seeing a sell-off here. Of course, this name was up today, though, into this news, following the PINS news, but not to be for Twitter here after the bell. A little bit of a mixed bag, EPS coming in $0.04. That's a penny light. The revenue number, quite substantial here. Revenue kind of crushing it at $936 versus the $780 that was expected. But the reason we're seeing Twitter so off right now is in the DAUs.

And actually, Twitter is so special they made up their own DAU. It's MDAU-- monetized DAUs. And they came in at $187 million. $195 million had been expected. So they only added $1 million over a quarter, I mean, during a time of a pandemic, during a time of an election, where you would think that they would be adding more people here.

So that's what the big concern is. Also, they note, you know, sports have come back. They're excited about that for the future looking out, but people wanted to see them adding more engagement in terms of actual hard numbers. And they did not deliver that.

DAN ROBERTS: Yeah, Jen, I'm so glad you said that, because just a quick thought on Twitter. I have been consistently so unimpressed with the user growth at that company. Now, of course, what defenders say-- and by the way, as you all know, I'm a huge fan of Twitter. I mean, I think it's a news utility. I see it as an information gathering tool. I use it constantly.

But how have they not been able to grow this user base better than they have? You have to place blame on management. I believe that-- I'm not going to say who would have done it better, but someone out there could have grown this platform better than it's grown.

I mean, separate from politics, you've got the president of the United States using it as his actual, you know, news release system. How are people not using it more? It's cited on news networks every day. There are banners that come straight from Twitter. And yet, they just still, after all this time, even though they've done better with selling ads, haven't figured out how to get more people using the platform.

And I always use this-- I know it's anecdata, but I always use this example. I have friends who aren't in tech or media who don't have Twitter accounts. And I always say to them, how? How do you not use it? And they always say, I don't need that. It's stupid. They don't get it. And that's because Twitter just hasn't told its story well enough.

ANDY SERWER: Yeah, and you know, you're not the only person who didn't like Jack Dorsey as CEO, by the way. Don't forget, Elliott Management was in there earlier this year trying to shake things up. And they were extricated by the capital of Silver Lake, right? So Egon Durban is-- and company are right there, very concerned about this and wanting to make sure this ship is going in the right direction and fast, because they don't want their billion-dollar-plus investment going to waste here.

DAN ROBERTS: He's done great running Square.

ANDY SERWER: Well, right. Maybe, though-- maybe Silver Lake will get into that, or Elliott. Who knows?

SEANA SMITH: Again, just taking a look at the stock here as I pull it up on my phone, shares are moving higher right now, looks like, for Twitter. So about-- oh, excuse me, nope. They just flipped it negative, as my phone's updating, off just around 10% still. So still under a tremendous amount of pressure, trading right around 47 here in the after hours.