Twitter reports first-ever net profit

By : |February 9, 2018 0

After a wait of 12 long years, Twitter reported a net profit for the first time pulling in $91 million on $732 million in revenue, a 2 percent rise year-over-year.

Though the overall user numbers were flat, but the company was still able to post a surprising profit and fell above what Wall Street expected for its fourth-quarter earnings. Twitter shares jumped more than 20 percent in after-hours trading.

The company said during its earnings report in October that if it hit the high end of its estimates of $220 million to $240 million in adjusted earnings before interest, taxes, depreciation and amortization in the fourth quarter, it could be profitable under generally accepted accounting principles. The company’s adjusted EBITDA for Q4 was $308 million, ahead of the estimated $241 million analysts were predicting. GAAP net income was $91 million, while non-GAAP net income was $141 million.

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Twitter continued a push to diversify its sales beyond advertising. It reported $87 million from data licensing and other revenue, up 10 percent from a year earlier, while advertising revenue rose 1 percent to $644 million.

The micro-blogging site, however missed Wall Street targets for people using the service, reporting 330 million monthly active users for the quarter, a 4% increase from a year earlier but flat from the third quarter. Twitter said usage was hurt by seasonal weakness and a change that Apple made to its Safari web browser that reduced the tally of users by 2 million. Twitter had warned investors about the two factors in October.

Twitter also said in a shareholder letter that it had stepped up efforts to reduce spam, automated accounts known as “bots” and fake accounts.

Twitter did a lot last year to improve user experience on its platform including doubling the number of characters allowed in each tweet, from 140 to 280, and tried to limit the harassment of women and minorities on the site. It has also struck deals with media companies for live news and entertainment shows.

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