Twitter shares jump on rise in user numbers, revenue
Shares in Twitter jumped Thursday after the social media company said its revenue growth and user numbers exceeded forecasts in the latest quarter, though profit fell.
The San Francisco-based tech company said that fourth-quarter net earnings fell to $119 million, or 15 cents per share. That's down from $255 million, or 33 cents, in the same period a year earlier.
The short messaging service posted revenue of $1.01 billion in the period, 11% higher than a year ago, and the first time that it surpassed the $1 billion mark.
The company reached a “new milestone” for revenue in the quarter, Chief Financial Officer Ned Segal said, “reflecting steady progress on revenue product and solid performance across most major geographies, with particular strength in U.S. advertising."
The company had 152 million daily users in the latest quarter, up from 145 million in the previous quarter.
While the net income figure was below analyst forecasts for $231 million, other figures cheered investors, sending shares up a sharp 16% in early trading.
The sales figure was on the upper end of market expectations, according to data provider FactSet. And the number of active daily users was above the forecast for 147 million.
Last year, Twitter started disclosing its daily user base - that is, users who log into the site at least once a day and see ads on the platform. The daily metric has replaced its monthly user count, which Twitter said it will no longer disclose. Other companies, such as Facebook, give both daily and monthly counts.
Twitter executives said the company is making it a priority to clean up its platform.
“We'll increase healthy public conversation,” CEO Jack Dorsey said on a call with analysts. “Misleading information is probably the biggest challenge facing us and our industry. This will be a key focus for us.”
Tech companies have been stepping up their efforts to remove misinformation, abuse, hate speech and spam. In Twitter's latest move, announced earlier this week, the company said it will start labeling or even taking down doctored or manipulated photos, audio and videos designed to mislead people.
For the year as a whole, Twitter posted net income of $1.47 billion on revenue of $3.46 billion. For the current quarter, Twitter forecasts revenue to come in between $825 million and $885 million.
Dorsey said he wanted Twitter's staff to be less focused on San Francisco, in an indication that he thinks the company should look more to fast-growing international markets.
“Our concentration in San Francisco is not serving us any longer,” Dorsey said. “We'll strive to be a far more distributed workforce which will help us improve our execution.”
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