Social media stocks like Twitter (NYSE: TWTR) have been in the news recently as they went to court to present their side of the story regarding Russian involvement in the US elections. Twitter also made some news earlier last month when it delivered a quarterly performance that outpaced market expectations. But the worst is hardly over for the company.

Twitter’s Financials

For the third quarter, Twitter’s revenue fell 4% over the year to $590 million driven by an 18% decline in the US advertising revenues to $264 million. Total advertising revenues for the company fell 8% to $503 million. Its net loss narrowed to $21 million in the quarter, compared with a loss of $103 million a year ago. Adjusted EBITDA increased 14% to $207 million, or $0.10 per share, due to a reduction in R&D and marketing costs. The market was looking for revenues of $586 million and an adjusted EPS of $0.06.

Among operating metrics, Twitter’s average monthly active users grew 4% to 330 million in the quarter with US MAUs growing 4% to 69 million. International subscriber base improved 4.4% over the year to 261 million. Twitter also disclosed that it had been incorrectly reporting users so far as it was including users of some third-party apps. The restatement of the said figures reduced the monthly user count by 2 million for the second quarter.

Advertising metrics also reported an improvement with total ad engagements growing 99% over the year, with an increased focus on video ad impressions. Ad metrics were also helped by better targeting and ad relevance. Average Cost Per Engagement fell 54% over the year due to a bigger contribution of video ad engagements.

Twitter is hopeful of turning GAAP profitable in the current quarter. It expects an adjusted EBITDA of $220-$240 million, capital expenditures of less than $110 million, and stock-based compensation expense of $90-$100 million.

Twitter’s Video Focus

Inspired by the strong acceptance shown by the market for its video offerings, Twitter continues to add to this portfolio. During the quarter, it announced the addition of 30 live-streaming partnerships, including 10 within international waters. It now has more than 35 video partnership deals in the Asia Pacific region alone. Twitter has been pushing its video consumption through the launch of auto-play videos. In the reported quarter, Twitter announced that it streamed 96 million hours of live user-generated content via Periscope. It still hasn’t figured out ways to monetize this content, and that offers a great opportunity for the company.

Twitter’s Russian Controversy

Meanwhile, like other social media stocks, Twitter has also been called in front of the Senate judiciary subcommittee to testify about the Russian involvement in the US elections. According to the testimony, Facebook believes that Russian-linked content may have reached 126 million Americans. Twitter claimed that it had 36,746 accounts that were associated with Russian accounts. These accounts generated 1.4 million automated, election-related Tweets, which collectively received approximately 288 million impressions. Twitter also suspended 2,752 Russian-linked accounts and banned advertising from all accounts owned by Russia Today and Sputnik. But according to analysts, the manipulation on Twitter comes from fake and automated accounts that don’t involve advertising and training Twitter’s algorithms to identify malicious tweeters may not be so easy. Additionally, Twitter, like Facebook, has promised to be more transparent about who buys political ads on its platform.

Its stock is trading at $20.62 with a market capitalization of $15.1 billion. It touched a 52-week high of $21.96 last month. It had fallen to a 52-week low of $14.12 in April this year.

Twitter’s better than expected earnings and the possibility of profits have helped drive the stock up. But it is still failing on delivering revenue growth. Its ad revenues have been declining, despite a growth in user base and ad impression trends. Within social media advertising, Facebook remains the platform of choice and for video advertising, it will have a tough time to beat YouTube. Analysts estimate that Twitter will deliver a revenue growth of 5.7% next year, compared with the 5% decline this year. But compare that with Alphabet’s projected 18% growth.