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Twitter Ad Revenue Rises Despite Apple's Changes

Twitter said the third-quarter revenue impact from Apple’s privacy-related changes was lower than expected.

Twitter  (TWTR) - Get Free Report swung to a loss for its third quarter, but reported ad sales in line with expectations, despite changes in Apple's  (AAPL) - Get Free Report privacy policy that have hurt other social media companies. 

Twitter said non-GAAP loss for the three months ending in September came in at 54 cents per share, compared to a profit of 19 cents per share from the same period last year and much lower than the Street consensus of a profit of 17 cents a share.

Group advertising revenues, Twitter said, rose 41% to $1.14 billion, while total revenues were up 37% at $1.28 billion, with both figures in line with analysts' forecast and Twitter's own estimate of between $1.22 billion and $1.3 billion.

Twitter said that its metric of 'monetizable daily active users' (mDAU) rose 13% from last year to 211 million, with U.S. figures rising 4% to 37 million and international totals rising 15% to 174 million.  

"Revenue product improvements, strong sales execution, and a broad increase in advertiser demand contributed to 41% year-over-year growth in ad revenue in Q3," the company said in a statement. "We continued to make progress on our brand and direct response offerings, with updated ad formats, improved targeting, and better measurement," said Twitter.

"It is still too early for Twitter to assess the long-term impact of Apple’s privacy-related iOS changes, but the Q3 revenue impact was lower than expected, and we have incorporated an ongoing modest impact into our Q4 guidance," the company said.

Twitter shares rose about 3% in extended-hours trading immediately following the earnings release. 

Apple's recent privacy changes, which make it more difficult for social media companies to track and target users with specific and targeted ads, were cited by both Snap Inc  (SNAP) - Get Free Report and Facebook  (FB) - Get Free Report as triggers to softer-than-expected fourth quarter revenue guidance. 

Twitter expects overall revenue to be between $1.5 billion and $1.6 billion in the fourth quarter.

Earlier this month, Twitter said it was selling mobile-ad firm MoPub to AppLovin  (APP) - Get Free Report for $1.05 billion cash.

“The sale of MoPub positions us to concentrate more of our efforts on the massive potential for ads on our website and in our apps,” CFO Ned Segal said in a statement.