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Q4 2017 results: After 12 years, Twitter has its first profitable quarter

Twitter

It took them 12 years, but Twitter has finally registered a profit. While announcing its results for Q4 2017, the company said that it had earned a profit of $91.1 million. Revenue is up by 2% year-on-year at 731.6 million versus 686.4 million in the same quarter the previous year.

Despite that, Twitter’s user base didn’t grow at all last quarter. The company still has 330 million monthly-active-users, up 4% compared to the same quarter a year ago, but no change from Q3 2017.

The lower-than-projected monthly-active-user count was attributed by the company in part to stepped-up efforts to reduce spam, malicious activity and fake accounts.

Twitter did report that its daily active user base grew by 12%, its fifth straight quarter of double-digit growth. But the caveat here is that Twitter doesn’t reveal how many users are active daily, so it’s difficult to put the growth numbers into perspective.

The social media giant may not be too worried though. Profitability was one of the company’s main goals in 2017. To achieve this it laid off 9% of its workforce in late 2016, and then sold off its developer business and shut down its video app Vine.

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The company will invest in products this year that increase audience engagement, which will cause expenses to “more closely align with revenues,” Chief Financial Officer Ned Segal said during a conference call.

The shares soared as much as 30%, the most since Nov. 7, 2013, to $35. They were trading at $31.14 at 12:59 p.m. in New York, bringing gains over the past 12 months to about 66%.

Twitter will be doing more experimentation to make its timeline more “personalized and relevant” to people, CEO Jack Dorsey said. There will be “a much more cohesive strategy” around events, like seeing sports scores during live games, Dorsey said. New product tweaks, like Twitter’s decision to increase the character limit to 280, have increased engagement and minimized confusion, he added.

Facebook in a different stratosphere

Facebook as a social media platform may be Twitter’s biggest competitor but Facebook’s earnings put it in a completely different stratosphere. The company had posted total revenues of $12.97 billion for the December quarter, up 48% year-on-year (YoY) from $8.63 billion in Q4 2016. Advertising revenue contributed 98.5% or $12.78 billion of total revenues, while payments and other fees contributed $193 million.

Facebook’s mobile advertising revenue stood at $11.4, an increase of 57% YoY. It represented 89.2% of its total advertising revenue for the quarter, as compared to 84% of total ad revenue in the corresponding quarter the previous year.

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© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ