Twitter Records First Profit, Video Ad Revenues Drive Boost

Despite missing activity estimates, Twitter just reported its first quarterly profit since going public in 2013.

During the fourth quarter of 2017, the social giant took in $91 million. By contrast, the company lost $167 million during the same period in 2016.

Revenue also increased during the fourth quarter to $732 million -- up from $717 million in the fourth quarter of 2016.

“Owned-and-operated advertising revenue increased 7% year-over-year, driven by continued strong engagement growth, improvements in our revenue products, improved return for advertisers, and better sales execution,” Ned Segal, Twitter’s CFO, noted on Thursday.

More broadly, Twitter credited continued improvements to its flagship app and greater video ad opportunities for its performance boost.

On a less impressive note, Twitter reported average monthly active users (MAUs) of 330 million during the fourth quarter, which was flat compared to the third quarter and up 4% year-over-year. In large part, the company blamed its modest MAU figures on continued efforts to curb spam, fake accounts, and other bad actors.



Year-over-year, however, average daily active users (DAUs) grew 12%, which marked the fifth consecutive quarter of double-digit DAU growth.

Apart from advertising revenue, Twitter racked up $87 million in data licensing and other revenue, which was up 10% year-over-year.

Analysts responded to Twitter’s latest quarterly performance with measured optimism, on Thursday.

“Overall, the results represented ongoing progress, which was consistent with our longer-term expectations for Twitter as a durable, if niche-y (but highly differentiated), platform for digital advertising, which should eventually be able to approach industry-level growth rates,” Pivotal Research analyst Brian Wieser said in a note to investors.

Regarding Twitter’s allure as an acquisition target, Wieser commented: “We don’t think any transaction is likely to occur any time soon, if ever.” 

Last month, Twitter COO Anthony Noto said he was leaving the company. Noto, who is credited with contributing to Twitter’s financial turnaround over the past year or so, is taking the CEO spot at Social Finance, a financial technology company.

CEO Jack Dorsey said Twitter has no plans to replace Noto. Matt Derella, Twitter’s vice president of global revenue and operations, will continue to lead the company’s ad sales efforts.

Among other issues impacting Twitter’s popularity. Twitter has admitted that it could do a better job of communicating its content-policing policies to users. In November, the company published a clearer version of such policies.

As promised, late last year, Twitter started cracking down on what it considers to be “hateful” content.

Along with direct threats of violence, the social network is now taking action against content that glorifies or condones such acts. Going forward, Twitter has also promised to permanently suspend accounts identified as the source of tweets featuring nonconsensual nudity.

To further restrict cases of sexual harassment, Twitter has vowed to conduct full account reviews whenever it receives tweet-level reports regarding nonconsensual nudity.

As for new products, Twitter is reportedly working on a tool that will make it easier for users to share videos.

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