Twitter just reported its first profitable quarter ever, but didn't add any new users in Q4
After almost 12 years, Twitter is finally profitable.
The company had its first profitable quarter ever in Q4, reporting profits of $91 million on $732 million in revenue, a jump of 2 percent over last year. Wall Street was looking for revenue of $686 million for the quarter.
It’s the first time Twitter reported year-over-year revenue growth in the past four quarters.
That positive news was coupled with the fact that Twitter’s user base didn’t grow at all last quarter. The company still has 330 million monthly users, up 4 percent from a year ago, but not up at all over Q3. Analysts had modest expectations, and were looking for a jump of just 1 million.
Twitter did report that its daily active user base grew by 12 percent, its fifth straight quarter of double digit growth. The caveat there is that Twitter doesn’t say how big that user base actually is, so it’s tough to put the growth numbers into perspective.
Similar to Facebook, it looks like Twitter has officially tapped out its user base in the United States. The company reported 68 million U.S. users last quarter, down from 69 million in Q3. Twitter fluctuated back and forth between those two numbers for all of 2017, so it wasn’t a total surprise. But the concern there is that U.S. users are much more valuable than those in other countries. Those 68 million users accounted for more than half of Twitter’s advertising revenue last quarter.
But Twitter’s business numbers look like they’ll compensate for any concerns about the company’s user growth. Achieving profitability was one of the company’s main goals in 2017, and one of the big reasons it laid off 9 percent of its workforce in late 2016, and then sold off its developer business and shut down its video app Vine. Investors like profitable companies, and so do potential acquirers.
Twitter stock is up 13 percent in early pre-market trading.
https://www.recode.net/2018/2/8/16989834/twitter-q4-2018-earnings-revenue-jack-dorsey