Twitter Inc. (NYSE:TWTR) reported Q3 earnings that topped analysts’ earnings and revenue estimates but were outweighed by slowing monetizable daily active users’ growth.

Strong Q3 performance

This strong performance comes amid heightened criticism and the overwhelming challenge of handling posts on the US election, which is an event that has brought uncertainty to ad behavior. The company‚Äôs mDAUs grew by 1 million from the previous quarter to 187 million missing the analysts’ estimates of 195 million mDAUs for Q3. However, the 187 million mDAUs in Q3 is a 29% YoY increase.

The company reported a 14% growth in YoY revenue to $936 million, with EPS of $0.19 beating estimates of $0.14 per share. The exceptional revenue growth was boosted by ad recovery, with ad revenue increasing 15% YoY to $808 million. Over the same period, total ad engagement grew 27% with the return of live events and product launches; there were previously halted driving increased ad spending. However, the company has indicated that the upcoming US election is making advertiser behavior difficult to forecast.

According to the company released in the second quarter, most brands stopped or paused ad spending in response to civil unrest in the US. However, the brands have increased ad spending rapidly in an effort to catch up. The electioneering period is somewhat making things uncertain, but there is no concern that the September revenue trend won’t continue or even be better beyond the election window.

Twitter working on a subscription service

The company’s CFO Ned Segal alluded to rumors from the previous quarter that it might be working on a subscription service. A job posting sparked the speculation of a subscription service. Segal says that the company will begin testing the new features soon, but it will not impact ad revenue this year.

Twitter said that considering business conditions are improving; it will continue investing in the most important work. The company expects total GAAP expenses and costs to grow by 20% YoY in Q4. This was the expectation for the full year before the pandemic.