After 11 years and seven months in operation, and billions and billions of dollars in losses, Twitter today said it is, at long last, a profitable business.
The shoutfest broker of memes, sarcasm, news, jokes, harassment, Russian trolls, and so so much wailing, declared it had, for the first time ever, managed to make money in a quarter. For the three months to December 31, 2017, we're told:
- It recorded sales of $732m, up two per cent from Q4 2016 and well ahead of estimates of $686m.
- A profit of $91m, the first time Twitter has managed to have a net income without resorting to non-GAAP accounting. Good for them.
- Earnings per share of $0.19 (non-GAAP) that beat analyst estimates of $0.14
- Its number of returning twits were less encouraging. Monthly active users were flat from Q3 2017 at 330 million. Over the past 12 months, the site has only picked up about two million new monthly active users (Twitter reported 328 million in Q1.)
For the full year, Twitter was still a cash bonfire:
- Revenues of $2.4bn were down three per cent year over year.
- A net loss of $108m was better than the previous year's $457m loss.
- Earnings per share of $0.44 (non-GAAP) were up from $0.37 last year. Again, that's non-GAAP (aka "Enron math").
A big part of the rise to profitability was cost-cutting. Twitter, based in San Francisco, USA, told investors it has reduced expenses by 28 per cent from Q4 2016.
"We returned to revenue growth, achieved our goal of GAAP profitability, increased our shipping cadence, and reached five consecutive quarters of double digit [daily active user] growth," said CEO Jack Dorsey.
"I’m proud of the steady progress we made in 2017, and confident in our path ahead."
Investors were also impressed by the strong showing. By midday, Twitter shares were up 17.5 per cent at $31.68. ®