Twitter touted user gains in the third quarter of 2021 and reported healthy revenue growth but it dramatically missed Wall Street earnings estimates.

The company said average monetizable DAUs reached 211 million in the quarter, up 13% year over year, a net gain of 5 million in the period. Average U.S. mDAUs were 37 million for Q3, flat with the prior quarter.

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Revenue growth outpaced Twitter’s increase in users: Q3 sales totaled $1.28 billion, an increase of 37% year over year. In the U.S., where mDAU grew by a net 1 million year-over-year, revenue was up 45% to $742 million.

In its letter to shareholders, Twitter said Apple’s iOS 14.5 privacy change, which requires user opt-in for ad tracking, had an increased impact on Q3 revenue compared with Q2 but that it “remained modest.”

“It is still too early for Twitter to assess the long-term impact of Apple’s privacy-related iOS changes, but the Q3 revenue impact was lower than expected, and we have incorporated an ongoing modest impact into our Q4 guidance,” the company said.

Twitter’s net loss was $537 million, representing a net margin of -42% and diluted earnings per share of -67 cents. The loss in the period includes a one-time litigation-related net charge of $766 million for Q3, related to the company’s agreement to settle a class-action lawsuit alleging Twitter and its executives provided misleading user-engagement info to investors.

On average, financial analysts expected Twitter to post $1.28 billion in revenue and adjusted EPS of 15 cents, according to Refinitiv data.

Twitter shares rose more than 3% in after-hours trading, as investors were encouraged by the social network’s positive Q4 guidance and perhaps relief that the iOS 14.5 impact wasn’t more severe. For the fourth quarter, Twitter expects revenue to be between $1.5 billion and $1.6 billion and operating income to be between $130 million and $180 million.

“I am proud of our third quarter results,” Twitter chief Jack Dorsey said in a statement. “We’re improving personalization, facilitating conversation, delivering relevant news, and finding new ways to help people get paid on Twitter.”

Twitter called out Q3 deals to distribute video on the platform. Among those were a multiyear global extension of its existing partnership with Dow Jones, including a renewal of the “WSJ What’s Now” series, as well as new Barrons, Investor’s Business Daily and MarketWatch content; a global deal with IMG Fashion Events & Properties; and a pact with Fox Sports for college football highlights and opening-drive video streams, as well as a fan-powered “alternate camera angle” feature to let fans choose how to watch one of the top games of the week.

Meanwhile, Twitter’s stock-based compensation expense in Q3 rose 42% year over year, to $164 million. The company forecast Q4 stock-based compensation expense to be about $175 million.