Twitter Posts Strong Ad Revenue Growth Despite Apple Privacy Updates

Facebook Inc.

and

Snap Inc.

in recent days blamed changes in Apple app-privacy rules for slowing sales growth. The rules make it harder for advertisers to target their ads at audiences.

“The broader advertising ecosystem is still adjusting,” Twitter Chief Financial Officer

Ned Segal

told The Wall Street Journal, adding that “this has been less of a factor for us.”

Twitter shares rose more than 1% post-market trading after reporting its results.

Twitter’s revenue isn’t as tied to targeted digital ads as the businesses of some of its social-media rivals. Mr. Segal said brand advertising that generates around 85% of Twitter’s ad sales is experiencing less of an impact from Apple’s new rules.

Facebook and Snap said supply-chain constraints hitting the global economy also weighed on ad sales, as customers with less inventory to promote cut back on spending. Mr. Segal said Twitter didn’t experience that on a broad scale. More than half of ads on Twitter are linked to services and digital goods, such as financial tech company services or movie releases, which have been less affected by global supply disruptions.

“We haven’t seen it impact our performance in a meaningful way this year,” he said.

Still, Twitter swung to a net loss of $537 million, from a net profit of $29 million a year ago, largely linked to a one-time charge to settle a 2016 lawsuit that alleged the company misled shareholders. The charge knocked $766 million off the bottom line.

Twitter use, measured by monetizable daily active usage, was up 13% year-over-year to 211 million in the third quarter, topping the 11% increase seen in the second quarter.

The company known for its short-messaging system has continued to try to evolve and roll out new products to boost growth. In the third quarter, it launched a pilot of a shopping feature called Shop Module that allows businesses to showcase their products at the top of their profiles and users to purchase items without having to leave Twitter.

Not all such efforts were successful, though. In July, the company said it would scrap its Fleets feature, which allowed people to post tweets, pictures and videos that would disappear after 24 hours.

Twitter also is in the process of selling off MoPub, a mobile ad firm, to

AppLovin

for $1.05 billion.

For the current quarter, Twitter said it expects total revenue to reach between $1.5 billion and $1.6 billion.

Write to Meghan Bobrowsky at [email protected]