Monday 20th August 2018

Stop the presses: Twitter finally announces a profit

Jason Smith
by on 8th February 2018

Twitter share price surged by 22% this afternoon as the microblogging platform announced its first ever quarterly profit.

The San Francisco based start-up posted a net income of $91 million on revenues of $732 million for the final quarter of 2017 – in the same quarter in 2016, Twitter posted a total loss of over $168 million on revenues of $717 million.

Overall, Twitter generated a loss of $108 million on revenues of $2.44 billion in 2017. This contrasts with a total loss of $456 million on revenues of $2.52 billion in 2016. 88% of Twitter’s revenue for the final quarter of 2017 was revenue generated from advertising services.

Twitter also posted interesting information on its growth in advertising revenue in international markets. The Q4 earnings report signifies an 18% year-on-year increase in international advertising revenue but a 10% year-on-year decrease in advertising revenue from the US.

Of revenues reported, Japan seemed to be a particularly strong area of growth for Twitter; total revenue from Japan increase increased by 34% to $108 million.

The company also reported a 2% YoY increase in monthly active users in the United States and a 4% YoY increase in monthly active users in international markets, however this doesn’t really tell the whole story.

In absolute terms, monthly active users remained at 330 million as per the previous quarter (and well behind Facebook’s 2.1 billion MAUs), while monthly active users have declined by 1 million quarter-to-quarter in the USA.

Twitter attributes the decline in MAUs from the USA to Safari’s “third-party app integration”, which, with the release of iOS 11, has made it more challenging to log-in to third-party apps using social media login credentials.

They also state that their measures to improve “information quality” have also likely had an impact on reported MAUs. Some of these measures include attempts to reduce the amount of spam, automation and fake accounts on the platform.

The microblogging platform initiated a number of sweeping changes in 2017, the most noteworthy being increase the permitted character count of tweets from 140 to 280, a change which CEO Jack Dorsey says has been rolled out to most languages.