Twitter Posts Second Straight Quarterly Profit

"The monetization and ad growth machine at Twitter is finally heading in the right direction," one analyst says of the Q1 results.
Matthew HellerApril 26, 2018

Twitter may be making a habit of being profitable.

Hard on the heels of turning its first profit in the last three months of 2017, the social network repeated the performance in this year’s first quarter as revenue was boosted by growth in international markets.

Twitter’s adjusted earnings came in at 16 cents per share on revenue of $655 million, which was up 21% from a year ago. Analysts had expected EPS of 12 cents on revenue of $605 million.

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Twitter now has 336 million monthly active users, up about 3% over the same quarter last year. Nearly all of the growth came overseas, with Twitter’s 69 million users in the U.S. unchanged from a year earlier.

“This quarter shows the monetization and ad growth machine at Twitter is finally heading in the right direction after years of a ‘one step forward two steps back’ strategy,” GBH Insights analyst Daniel Ives wrote in a research note to clients.

Advertising revenue rose 21% to $575 million in the first quarter with the company seeing more traction from videos, which now make up more than half of its total ad revenue. International revenue jumped 53% to $318 million.

“The first quarter was a strong start to the year,” said Jack Dorsey, Twitter CEO. “We grew our audience and engagement, marking another quarter of double digit year-over-year [daily active user] growth, and continued our work to make it easier to follow topics, interests, and events on Twitter.”

As CNN Money reports, “Throughout the last year, Twitter has worked to make its product more engaging and intuitive to users by expanding the character limit, threading tweets and highlighting content around events like sports games.”

There has also been a “perception shift” on Wall Street, The New York Times said, as “investors now no longer expect the company to be a growth rocket and instead see it as one that may cut its spending to become more profitable.”

“They’re not going to become the bright shiny object that they were,” said Brian Wieser, a senior analyst at Pivotal Research. “But they’re good enough.”