Twitter’s stock jumped up nearly 12 per cent after the company posted better than expected third-quarter earnings and predicted it could likely achieve profitability by the end of the year.
The information sharing platform reported Q3 revenues of $590 million on adjusted earnings per share of $0.10, down four per cent from the year prior. Twitter’s net loss narrowed to just over $21 million, a staggering drop from a loss of $102.9 million the same quarter in 2016. The company also slashed their expenses by 16 per cent year over year.
“This quarter we made progress in three key areas of our business: we grew our audience and engagement, made progress on a return to revenue growth, and achieved record profitability,” said Jack Dorsey, Twitter’s CEO in a release.
Despite the year-over-year decline in revenue, Twitter grew its daily active users by 14 per cent, marking the company’s the fourth consecutive quarter of double-digit growth.
“We’re proud that the improvements we’re making to the product continue to bring people back to Twitter on a daily basis,” said Dorsey.
Total monthly active users also grew four million to 330 million. However, it turns out Twitter had been overstating its monthly users since 2014 based on incorrect calculations. Twitter said in the letter to shareholders their growth reflects adjustments for one to two million users per quarter.
Although the U.S. is Twitter’s largest market, total U.S. revenue was down $332 million, an 11 per cent drop year over year. However, the company is seeing new revenue growth overseas. In Japan, revenue grew 23 per cent from the prior year and added $91 million to Twitter’s total revenue.
With video remaining the company’s largest ad format, Twitter inked 35 video deals in Asia Pacific, a region the company said is a “strong engine of future growth.”
“Our momentum was driven by improved execution from our sales team, strength in video and direct response ad formats, as well as in our data business, where we saw our third consecutive quarter of accelerating year-over-year growth,” said Ned Segal, Twitter’s CFO.
Twitter’s stock currently sits at $19 USD.