Twitter suffered losses of over half a billion dollars in the three months to September following its settlement payment of $809.5m (£588m) regarding a long-running lawsuit.
The social media company faced the accusation of misleading investors regarding its user engagement in 2015. Nonetheless, the company’s quarterly revenue rose by 37% as it dealt with the impact of Apple’s privacy changes which impacted rivals including Snap and Facebook. Consequently, Twitter’s shares went up by 3%.
An expensive settlement
Earlier, in September the social media giant agreed to settle a class action with its shareholders dating back to 2016.
The suit involved accusing Twitter of misleading investors regarding the number of active users on the platform each month as well as the frequency of their usage of the app.
The company denied the claims but agreed to settle the claim using cash on hand, stating that it would hurt its bottom line this quarter. Twitter reported a net loss of $537m (£390m) during the third quarter.
Apple’s privacy updates
However, the San Francisco-based company also had some positive news. The company remained insulated from the negative effects of Apple’s privacy changes in comparison to its rival Snap whose shares plummeted 25% last week.
Twitter generated $1.14bn (£830m) in advertising revenue during the quarter, terming the impact “modest” as the majority of its advertisers are not reliant on highly targeted ads.
Chief Financial Officer Ned Segal talking during a conference call with analysts said that the social media platform is working on expanding its targeted advertising business using methods such as introducing topics that Twitter users can follow.
He said, “A lot of this is opportunity that’s in front of us”.
Apple rolled out its privacy updates in June that prevent digital advertisers from tracking iPhone consumers without their consent.
Facebook hinted that updates are causing the company “headwinds” when it released its earnings earlier this week.
