Twitter moves to profit, with revenues rising 2% in Q4

Twitter turns first profit ever, but problems remain

Twitter turns first profit ever, but problems remain

Twitter announced Thursday it made a net profit in the final quarter of 2017, marking the first time the social media giant has had a profitable quarter. CEO Jack Dorsey has been heavily criticized for being slow to change any aspects of Twitter, and that's been reflected in the company itself.

At time of publication, shares were up about 20 percent to $32.37 in pre-market trading. It reported profit of $91M on revenues of $732 in Q4 2017, in contrast to a loss of $167M in the same quarter the previous year ... That is up 2% year-over-year, but for the full year, it is down 3%.

Twitter (NYSE:TWTR) was downgraded by stock analysts at Pivotal Research from a "hold" rating to a "sell" rating in a research report issued to clients and investors on Thursday.

The social network made $91 million (£65m) in the fourth quarter of 2017, up from a $167m loss a year earlier. Highlighting Twitter's expectations for its momentum to continue, this guidance compares to adjusted EBITDA of $170 million and an adjusted EBITDA margin of 31% in the year-ago quarter. During Thursday's earnings call, Segal said the change resulted in 1 million fewer monthly users in the USA and 1 million fewer outside of the US. Sales in the United States dropped by about 8 percent in the fourth quarter, but the company grew its revenue internationally including in Japan. Average daily active users (DAU) rose 12 percent year-over-year.

Twitter won't be replacing Noto, but it has tried to unify content and revenue strategy, Dorsey said, by handing global revenue VP Matt Derella more responsibility over content partnerships. The company told investors past year that they expected their first profitable quarter soon due to cost-cutting measures implemented by the company.

However, compared to past year, Twitter's monthly active users (MAUs) have grown four percent. Nordea Investment Management AB lifted its holdings in shares of Twitter by 2.3% in the 2nd quarter.

Twitter's advertising revenue was $644 million, up 1% year over year.

Monthly active users were broadly flat at 330 million, however, slightly behind analysts´ estimates.

One estimate puts Twitter's daily active user number at 125 million people. Beyond cost cuts, Twitter has pushed for product tweaks to make the service more intuitive to new and existing users.

Twitter continued a push to diversify its sales beyond advertising.

The report added to positive momentum in recent months for Twitter, which spent the second half of 2017 explaining how Russian-linked accounts - including automated bots - influenced content on its platform around the 2016 U.S. presidential election.

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