Twitter rockets after posting first-ever quarterly profit on increased video ad revenue
Twitter Inc
$53.70
11:00 08/03/24
Social media giant Twitter posted its first net quarterly profit in history on Thursday, as rising sales of video advertising space across the microblog helped offset concerns over user numbers falling short of expectations on the Street.
In its report card for the three months ended 31 October, Twitter hinted that it may finally turn a profit, something that its previous inability to do so confused investors, considering the platform's adoption by a multitude of celebrities and politicians.
But, after severely slashing expenses in the previous quarter, Twitter swung to a net profit of $91.1m for its fourth trading quarter – a 154% improvement on the previous year's $167.1m loss.
Adjusted profit came in at $0.19 per share, beating analyst expectations of $0.14, thanks to a 2% kick in revenue to $731.6m that also beat the Street's estimates of around $686m, the first revenue growth Twitter had seen since 2016's closing quarter.
However, Twitter fell short of targets in terms of user numbers, reporting 330m monthly active users across the three months leading to 31 December, a 4% jump from twelve months earlier but flat from the third quarter.
Analysts on average had expected 332.5m, but Twitter said usage had been hit by seasonal weakness and an update to Apple's Safari web browser which cut the tally of users by 2m.
The falling tally of users, closely watched by investors as a sign of future advertising sales potential, comes shortly after Twitter upped its efforts to diversify its sales beyond advertising, reporting $87m worth of revenue from data licensing and other avenues, up 10% from a year earlier, while advertising revenue crept ahead 1% to $644m.
As of 1400 GMT, shares had gained 25.42% in pre-market trading to $33.75 per share.