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Photo: Richard Drew / AP

Twitter stock was up over 10% in pre-market trading Thursday after the company announced that it beat revenue and growth expectations. But the success is being overshadowed by the fact that the company admitted to inflating user growth over by approximately 1-2 million users per quarter for four quarters. The company said in a letter to shareholders that the miscalculation occurred from including "certain third-party applications" that should not have been counted in Twitter's monthly active users number.

Why it matters: Twitter has faced criticism in the past for inflating video metrics and for its "inadequate" response (Sen. Mark Warner's words) to the Senate Intelligence Community's inquiry into Russia involvement on its platform. At a time when technology platforms are under increased scrutiny for not being transparent enough, this type of admission only plays into the narrative that tech companies are not properly policing themselves.

Other key figures.

  • Revenue: Twitter surpassed revenue expectations for Q3, reporting a 4.2% decline in revenue to $590 million, which is slightly better than the losses that were expected.
  • Users: It increased its Daily Active User (DAU) base 14% year-over-year in Q3 and 4 million Monthly Active Users (MAUs) in Q3, bringing its total monthly active user count to 330 million.
  • Losses: Twitter reported a loss of $21.1 million, the smallest loss that Twitter has posted since going public.
  • Profit: Twitter raised its earnings forecast for the fourth quarter next year and said if it hits the high end of that number, it could achieve its first-ever profitable quarter since going public — a huge feat for the company facing pressure to compete for advertising revenue against its main competitors, Facebook, Instagram and Snapchat.
  • Market growth: Twitter said the majority of its growth came from its top 10 global markets, including the U.S., which have a greater potential to generate advertising revenue.

Clarification: This post has been updated to reflect that the inaccurate MAU numbers were counted over four quarters, not 11.

Go deeper

Fed Chair Jerome Powell says U.S. economy is at an "inflection point"

A screenshot of Federal Reserve Chair Jerome Powell on "60 Minutes." Photo: CBS

Federal Reserve Chair Jerome Powell told CBS' "60 Minutes" in an interview broadcast Sunday that the U.S. economy is at an "inflection point," with growth and job creation forecasts looking strong.

Of note: In his interview with CBS' Scott Pelley, Powell said it's "highly unlikely" the Fed would raise interest rates this year.

Virginia governor orders probe into pepper-spraying of Army officer

Virginia Gov. Ralph Northam at the Governor's Mansion in Richmond, Va. in 2019. Photo: Katherine Frey/The Washington Post via Getty Images

Virginia Gov. Ralph Northam (D) announced Sunday he's ordered the state police to conduct an independent investigation into a traffic stop during which two officers pepper-sprayed and drew guns on an Army lieutenant.

Driving the news: Caron Nazario, who is Black and Latino, is suing the police officers over the incident, which attracted widespread criticism after video footage emerged. Northam said in a statement he found the incident "disturbing" and that it angered him.

Biden pollster urges blunt tax talk

Illustration: Aïda Amer/Axios

The top pollster for Joe Biden's presidential campaign is advising the White House to do something that often makes Democrats nervous: Talk loudly and proudly about raising taxes on the rich.

Why it matters: John Anzalone tells Axios his extensive polling and research has found that few issues receive broader support than raising taxes on corporations and people earning more than $400,000 a year.

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