Twitter has recorded its first ever profitable quarter thanks to a return to revenue growth and cost cutting.
The company brought in $91 million in profit off revenue of $732 million in the fourth quarter of 2017. That news sent the company’s stock to a high of $35.00, before closing $30.18, a 12 per cent improvememt on Wednesday’s closing price.
Twitter, which was founded in 2002, went public in 2013 at $26 a share.
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The company’s $91 million profit compares to a $167 million loss for the same period a year earlier.
For the full year Twitter’s losses narrowed from $457 million in 2016 to $108 million in 2017.
During the quarter revenue rose 2 per cent, after four straight quarters of decline, to $732 million. Owned-and-operated advertising revenue increasing 7 per cent year-over-year.
Total annual revenue was $2.4 billion, a decrease of 3 per cent year-over-year.
Twitter CEO Jack Dorsey said the performance was due to “strong engagement growth, improvements in our revenue products, improved ROI, and better sales execution.”
The company didn’t add any new users during the quarter. Twitter’s user numbers remained flat at 330 million, which was the same as Q3 and up 4 per cent year-over-year.
Average daily active users grew 12 per cent year-over-year, marking the fifth consecutive quarter of double-digit growth.
During a call with investors, Dorsey said Twitter’s advertising products were performing better with a higher click through rate and the company is investing in its measurement capabilities.
Twitter has also completed its roll out of 280 character tweets. A change the company says is leading to increased engagement, less complexity for users and fewer “abandoned tweets.”
In the past users would hit the 140 character limit and give up on trying to send a tweet, Dorsey said.
“We’re seeing less abandonment of tweets, but we’re also seeing a lot more engagement,” Dorsey said.
“We’re seeing a lot more retweets and we’re seeing a lot more mentions and we’re also seeing people get more followers and return more often. So, we do believe that it is minimising some of the complexities and some of the confusion around Twitter, in general, but more importantly it’s enabling people to be a lot more expressive and share what’s on their minds and that little bit of room extra has really proven to help.”