Twitter celebrates first annual profit

The San Francisco company disclosed its daily user base count for the first time, putting the figure at 126 million, up 9 percent from a year earlier. It marked the fifth straight quarterly profit after years of losses.

Chief executive Jack Dorsey said: "2018 is proof that our long-term strategy is working".

The big issue that Twitter is facing, and likely the reason why investors are selling their stock today, is that it has not grown in the U.S. for a number of years now.

Monthly active users totaled 321 million in the fourth quarter, in line with analysts' forecasts but down from 330 million a year earlier and 326 million in the third quarter.

We want to provide something valuable to people on Twitter every day, and we believe that monetizable DAU (mDAU), and its related growth, are the best ways to measure our success. That included 27 million in the USA and 99 million internationally who log in and use Twitter on applications where ads may be viewed.

Twitter has historically disclosed the percentage growth of its daily users but not the actual figure.

Increased spending is a common theme across social media companies, including Facebook and Google, as they double down on efforts to clean up their respective platforms, Summit Insights analyst Jonathan Kees said.

Anthony Capano, managing director EMEA at Rakuten Marketing, commented: "These latest results mark the continuation of a winning streak for Twitter with a fifth straight quarter of GAAP profitability". So, starting this quarter, in addition to sharing the growth in mDAU as we have since 2016, we are disclosing the absolute number of average mDAU (previously referred to as DAU), for both the USA and worldwide markets.

Annual ad revenues climbed 24% to $2.62bn, with video not only accounting for more than half of that total but also continuing to be the fastest-growing type of advertising.

Markets also appeared unsettled by a weaker-than-expected revenue outlook for the current quarter and rising expenses.

Enberg said the growth in daily users, however, means that people are still "highly engaged" on Twitter, which advertisers will take as a positive sign. The company's shares increased 35 percent in the past 12 months through Wednesday's close, as investors grew optimistic about Twitter's ability to attract more advertisers to the service, which has benefited from new formats like video.

Shares down more than 10 per cent in midday trading on Thursday.

Twitter said its mDAU are not comparable to current disclosures from other companies, many of whom share a more expansive metric that includes people who are not seeing ads.

A tweet by the company said the focus on health and safety remains a priority.

"We enter this year confident that we will continue to deliver strong performance by focusing on making Twitter a healthier and more conversational service", he added.

Vanessa Coleman

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