BUSINESS NEWS - The San Francisco-based one-to-many microblogging service said it earned $91 million in the fourth quarter, the first positive net income since going public in 2013.
Twitter shares rallied 12 percent to close at $30.18, their highest levels in over a year, after intraday gains as much as 26 percent despite brutal declines for the main stock indexes.
Revenue for Twitter increased two percent from a year ago to a better-than-expected $732 million.
The number of monthly active users was 330 million, unchanged from the prior quarter but up four percent from a year earlier.
Profitability is an important achievement for Twitter, which has lost money consistently since its public offering, sparking speculation on whether it needed to sell itself to keep operating.
While Twitter has built a solid core base of celebrities, politicians and journalists, it has failed to match the broader appeal of Facebook and other social platforms, hurting its ability to bring in ad revenues.
Chief executive Jack Dorsey welcomed “a strong finish to the year,” and added “I’m proud of the steady progress we made in 2017, and confident in our path ahead.”
The network has stepped up efforts to boost its user base and engagement, adding streaming video partnerships, doubling the character limit on tweets to 280 and making it easier to create “tweetstorms” by stringing messaging together.
Dorsey told a conference call that by relaxing the limits, “it minimizes some of the complexities” of using the platform and added, “more importantly it is enabling people to be more expressive about what’s on their minds.”
Debra Aho Williamson of the research firm eMarketer said “this was the quarter Twitter needed to prove itself to investors.”
“It’s too early to say whether they’ve turned a corner but they have certainly gotten off to a good start with the fourth quarter results,” she added, noting that the results still highlight sluggish user growth, a decline in US users possibly linked to a push to remove automated accounts or “bots.”
