Shares in Twitter Inc. plunged in after-hours trading after the microblogging service delivered mixed third-quarter earnings results today.

For the quarter ended Sept. 30, Twitter reported a profit of 19 cents per share on revenue of $936 million. Analysts had been predicting a six-cent-per-share profit on $777 million in revenue. Ad revenue came in at $808 million in the quarter, up 15% over the same quarter in 2019, while total ad engagement rose 27% over the same period.

Costs and expenses in the quarter rose 13%, to $880 million. Operating income came in at $56 million delivering a 6% operating margin compared with $44 million and a 5% operating margin a year ago.

Twitter said the increase in revenue was driven by a return of sporting and other events as well as increased and previously delayed product launches. Updated advertising formats and improved ad measurement also helped revenue.

Where the company disappointed was monetizable daily active users, its preferred metric, which came in at 187 million in the month, up 29% year-over-year but well shy of analysts’ forecast of 195 million.

The figures are a turnaround from the second quarter, when Twitter was heavily affected by a downturn in advertising driven by the COVID-19 pandemic and civil unrest in the U.S. In the second quarter, Twitter booked $683 million in revenue with costs of $807 million, resulting in an operating loss of $124 million. Notably, Twitter reported 186 million mDAUs in the second quarter, meaning that the company only saw growth of 1 million mDAUs in the third quarter.

The strong third-quarter results could be a one-off, however. Twitter didn’t provide estimates for its fiscal fourth quarter, instead warning that the U.S. presidential election could affect advertising.

“As we approach the U.S. election, however, it is hard to predict how advertiser behavior could change,” Twitter said in a statement. “In Q2, many brands slowed or paused spend in reaction to U.S. civil unrest, only to increase spend relatively quickly thereafter in an effort to catch up. The period surrounding the U.S. 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.”

Twitter did note that its expects expenses to grow 20% year-over-year in the quarter ahead because of increased investments.

Not providing formal estimates for the quarter ahead is not unprecedented. Some companies have not been providing guidance during the COVID-19 pandemic. But the fact that Twitter wouldn’t commit to numbers while also noting that its expenses were going to grow was not looked upon favorably by investors.

Twitter shares plunged almost 18% in after-hours trading. That followed a more than 8% rise in regular trading today.

The earnings came after Chief Executive Officer Jack Dorsey appeared for a congressional hearing into Section 230 of the Communications Decency Act on Wednesday. Dorsey clashed with Republican Senator Rand Paul, who asked Dorsey, “Who the hell elected you” as an arbiter of what’s misleading content. Despite the serious nature of the hearing, some media outlets spent more time writing about Dorsey’s beard than anything actually said at the hearing.

Image: Shawn Campbell/Flickr