EDINBURGH — Social media company Twitter has finally made a profit, but its share price fell on the news. This is because investors are partly concerned that the company is not growing its number of users as quickly as they had hoped. What’s more, analysts were disappointed with the financial reports, which show lower revenue than Wall Street consensus. Twitter has been on a campaign to clean out the trolls and abusive members of the Twitterati, which is partly why the number of users is lower than expected. But, no doubt, it is also vulnerable to a fickle social media crowd. Twitter (code: TWTR) is listed on the New York Stock Exchange. Twitter boss Jack Dorsey hopes that making Twitter a better place to play will pay off in the long run. The Wall Street Journal gives the low-down on its health. – Jackie Cameron
Twitter’s Push for Healthier Discourse Pays Off With Revenue Jump
By Georgia Wells
Twitter Inc. TWTR -0.61% reported record quarterly revenue and its first full year of profitability Thursday, signs the company’s efforts to promote healthy discourse on the platform appear to be paying off.
___STEADY_PAYWALL___
The company also for the first time disclosed its number of daily users: 126m, a figure Twitter said was up 1.6% from the previous quarter.
The figure makes it easier to compare Twitter with its social-media peers Facebook Inc. and Snap Inc., which have 1.52bn and 186m daily users, respectively. Twitter said it measures its number of daily users differently than other companies, because it counts only users who can view ads.
Revenue rose 24% to $908.8m in the fourth quarter, typically the heaviest spending period for advertisers, up from $731.6m a year earlier. Those results topped analysts’ projections of $867m, according to FactSet.
Even so, Twitter’s stock slid 5.4% before the bell as investors homed in on the company’s declining numbers of monthly users and its revenue forecast for the current quarter.
Twitter said its number of monthly users, the metric it has released for years, fell 1.5% to 321m from three months ago. Twitter has struggled for years with little to no momentum in building up its user base.
Chief Executive Jack Dorsey said last year the company’s priority was to reduce the amount of abuse that occurs on the platform. Although those efforts sometimes result in closing the accounts of bad actors, other users tend to spend more time on Twitter when there is less harassment. Marketers also say they are in favour of the changes, because they don’t like advertising alongside negative content.
Twitter projected a sequential decline in revenue in the first quarter to between $715m and $775m. While that would be up from $665m a year earlier, the range’s midpoint of $745m sits below the $764.93m analysts had penciled, according to Refinitiv.
Twitter’s profit in the fourth quarter increased to $255.3m, or 33 cents a share, from $91.1m, or 12 cents a share, a year earlier.
Robust spending in the online advertising industry also drove both Facebook’s record quarterly profit and Snap’s record quarterly revenue.
“Our efforts to improve health have delivered important results,” Mr. Dorsey said in a statement.
