San Francisco: Shares in Twitter jumped Thursday after the social media company said revenue and user numbers exceeded forecasts in the latest quarter, though profit fell as expenses rose.
The San Francisco-based tech company said that fourth-quarter net income fell to USD 119 million, or 15 cents per share. That's down from USD 255 million, or 33 cents, in the same period a year earlier. The short messaging service had revenue of USD 1.01 billion during the quarter, a 11 per cent increase and the first time revenue surpassed USD 1 billion.
Chief Financial Officer Ned Segal called it a "new milestone" for revenue. He said performance was solid in most of the world, with particularly strong advertising revenue in the US. The company averaged 152 million daily users during the last three months of the year, up from 145 million during the previous quarter. While the net income figure was below analyst forecasts for USD 231 million, other figures cheered investors, sending shares up a sharp 16 per cent to USD 38.88 in late morning trading Thursday.
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, or the number of users who log in 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 this week, the company said it will start labeling or even taking down doctored or manipulated photos, audio and videos designed to mislead people. All that requires more staff, contributing to a 22 per cent increase in expenses, to USD 854 million. Twitter expects to grow staff company-wide by at least 20 per cent in 2020, and expenses will grow about 20 per cent as well.
For the full year, Twitter had net income of USD 1.47 billion on revenue of USD 3.46 billion. For the current quarter, Twitter forecasts revenue to come in between USD 825 million and USD 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."