Twitter climbs on earnings beat, job cuts announcement

Twitter restructuring, announces layoffs
Twitter restructuring, announces layoffs

Twitter beat analysts' earnings expectations Thursday before the bell, adding that it plans to lay off about 350 people, or 9 percent of its global workforce as part of a restructuring.

The stock climbed more than 4 percent in after the market opened.

The social media giant posted third-quarter adjusted earnings of 13 cents per share on revenue of $616 million.

The company said the restructuring is focused on reorganizing the company's sales, partnerships and marketing efforts, in order to help Twitter achieve GAAP profitability in 2017. It posted a third-quarter GAAP net loss of $103 million, or 15 cents per share.

@TwitterIR: This morning we announced a restructuring and reduction in force affecting approximately 9% of Twitter's positions globally. #TWTR

"Our strategy is directly driving growth in audience and engagement, with an acceleration in year-over-year growth for daily active usage, Tweet impressions, and time spent for the second consecutive quarter," said Jack Dorsey, Twitter's CEO.

Analysts expected the company to post earnings of 9 cents per share on $606 million in revenue, according to a Thomson Reuters consensus estimate.

Twitter's average monthly active users for the three-month period increased to 317 million, up 4 million from its second quarter.

The company also saw a 7 percent increase in its number of daily active users, tweeting that it achieved record DAU levels in the U.S. during all three presidential debates.

The social media company was said to be courted by several companies who were reportedly interested in buying it last month, although no formal bids were made.

At the beginning of the Twitter's conference call with shareholders, Dorsey said he wanted to address the recent market speculation by saying the company's board is "committed to maximizing long-term shareholder value."

Twitter delved into livestreaming recently, through deals with the National Football League to show Thursday Night Football games and with Bloomberg to broadcast the first presidential debate. The company includes options to add short ads before and during the video or stream.

In a letter to its shareholders, Twitter said video has been its top revenue-generating advertising format for a second consecutive quarter. It added that marketer demand for the debate package was so strong that inventory for all four debates sold out in record time."

Analysts listening in on the conference call were curious as to how one-time, large-scale events like the Olympics or the presidential election would affect user growth next year.

Twitter CFO Anthony Noto said in the conference call the company was not going to give an outlook for growth for the fourth quarter or for 2017, but said the company is "very encouraged by product changes driving the acceleration in the last two quarters." He suggested they will continue to drive audience growth and engagement, rejecting the notion that they were one-time events.

The company reported $545 million in total advertising revenue, up $10 million from its second quarter and up 6 percent year over year.

Mobile advertising was responsible for 90 percent of that figure, up 1 percent from last quarter.

When asked whether there were any "revolutionary products" in the pipeline, Dorsey said the company's product is "already revolutionary" and Twitter is focused on improving its core product every single day. He said the timeline and notifications are areas people spend the majority of time in, so the company's focused on making those more relevant and personalized.

"We're focused on building the most useful, open and comprehensive news network on the planet," he said.

This is developing news. Please check back for updates.

— CNBC's Michelle Castillo contributed to this report.