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Twitter reported quarterly results on Thursday.

Dado Ruvic/Reuters

Twitter Inc on Thursday added fewer users than Wall Street had expected and said expenses would accelerate in the current quarter, sending its shares tumbling 13 per cent.

Shares of Twitter fell to $45.23 in after-market trading.

The San Francisco-based social media company said it had 187 million monetizable daily active users (mDAU) during the third quarter, missing consensus analyst expectations of 195.2 million users, according to IBES data from Refinitiv. The figure stood at 186 million in the previous quarter.

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Costs and expenses grew 13 per cent from the same period last year to $880 million, as the company said it spent more on infrastructure-related expenses.

Twitter said it expected its costs and expenses to grow closer to 20 per cent year over year in the current quarter, an acceleration on the rate in the third.

The company said it expected revenue trends could continue or even improve in the current quarter, but cautioned that it was hard to predict how advertisers would react as the U.S. presidential election nears on Nov. 3, and that there could be a pause in ad spending.

Twitter’s slow user growth, its expected higher costs and uncertainty about ad revenue in the fourth quarter are all causing concern among investors, said Michael Nathanson, an analyst with research firm MoffettNathanson.

Twitter said total revenue grew 14 per cent year-over-year to $936 million during the quarter ended Sept. 30, beating analyst estimates of $777.15 million.

The growth was helped by updated advertising formats, improved ad measurement and the return of events that had been paused due to the pandemic, said Twitter Chief Financial Officer Ned Segal in the earnings release.

Advertisers are often drawn to Twitter because the platform allows them to appear next to major cultural moments or conversation topics such as sports events.

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Last year, Twitter suffered from technical glitches that hurt its ability to target ads, though the company has since rolled out fixes.

Ad revenue in the third quarter grew 15 per cent to $808 million from the same period a year ago, surpassing estimates of $645.95 million.

Twitter noted that many companies paused ad spending during the second quarter due to widespread protests after the death of George Floyd in May and said there could be a similar dynamic with the U.S. election.

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