Twitter Reports First-Ever Quarterly Profit Despite Stagnant User Growth

Twitter Reports First-Ever Quarterly Profit Despite Stagnant User Growth

Twitter Reports First-Ever Quarterly Profit Despite Stagnant User Growth

The daily active users number was notably up 12% year over year, marking Twitter's fifth consecutive quarter of double-digit growth in the key metric.

Twitter has also been dealing with hateful comments from white supremacists and other abusive users. That means more time spent on the site, which means more opportunities for advertising.

Last month, Chief Operating Officer Anthony Noto announced his resignation from the company following Thursday's earnings report. That overall figure is also nowhere close to rival Facebook, which counts 2.13 billion users. Monthly users in the US averaged 68 million for the period, up 2% year-over-year and a decrease of 1 million quarter-over-quarter, reflecting the impact of the change in Safari. But it's been cutting costs and focusing on new revenue streams, such as live video.

Monthly active users in the USA market, where Twitter makes most of its revenue, fell to 68 million from 69 million in the third quarter.

For the current quarter, UBS calculated that Twitter would generate $583 million of revenue, $11 million more than analysts were predicting.

Adjusted profit was 19 cents per share, topping analysts expectations of 14 cents per share, according to Thomson Reuters I/B/E/S. Twitter's stock, meanwhile, is up more than 20% (and it at one point was up more than 25%) as we head into the initial trading for the day.

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Twitter (NYSE:TWTR) last issued its quarterly earnings data on Thursday, February 8th.

Nonetheless, Twitter has big challenges ahead.

Twitter also faces criticism as federal and state authorities scrutinize companies that sold millions of fake followers on social media services. While monthly active users, or MAUs, did not grow from the previous quarter, the ad revenue was up 28% sequentially, which we believe indicates the company's ability to more effectively monetize its users.

Twitter had a decent end to 2017, despite its bot problem. The company has introduced a slew of new measures to weed out abusive accounts.

Then there's the issue of automated accounts made to look like real people. Zacks Investment Research upgraded shares of Twitter from a "hold" rating to a "strong-buy" rating and set a $25.00 price target for the company in a research note on Tuesday, October 31st.

Twitter said that its usage was affected by changes that Apple made to its Safari browser. But the Times referenced a report saying it could be as high as 15 percent.

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So far, Twitter has struggled to build an active user base and has repeatedly failed to bring up more advertising revenues compared to its larger social media rivals like Facebook and Google.

Snapchat and Twitter both showed signs of long-awaited turnarounds this week, with analysts suggesting their businesses may be benefiting from concerns about Facebook's impact on users and society. "So, we wanted to experiment with giving them a little bit more room, and one of the things we're watching for is to see if the average tweet size would go up as a result and it has not".

"Now [that] he's gone, who's running the company?"

Technically, that's CEO Jack Dorsey.

"We haven't skipped a beat and we're really excited about looking at this [organization] in a new way but we have a lot of strength around the table and a lot of confidence to continue the strategy", Dorsey said.

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