Twitter Inc. reported its first quarterly profits on Thursday. The numbers were totally unexpected and represent a complete turnaround made by the company over the last few months. The growth in revenue was driven by Twitter’s expansion outside the US, and the positive financial performance had a massive effect on Twitter’s stock price. The shares rose to their highest in more than two years.
Overall gross revenue for the company was up 2% compared to a year earlier. It was a performance that was way above analyst estimates who predicted a drop in revenue for the fourth quarter in a row. The popularity of Twitter as a social media platform has never been questioned. The presence of celebrities, athletes, and important political leaders on the platform is a great vote of confidence. However, the company’s inability to maintain a steady revenue growth despite its unique competitive advantage has been a mystery for many investors.
But it seems that the company could just be on the right track. According to the report released on Thursday, revenues from outside the US were up 17%. However, US revenues didn’t do that well with a decline of 8% recorded. Japan was one of the key markets for Twitter. The report revealed that revenues from Japan rose by 34% to close at $106 million. This growth was attributed to an influx of Chinese exporters who use Twitter to market and advertise their products abroad.
Twitter shares steadily went up hitting a high of $35 per share before closing the day at $30.18. Twitter is one of the major social media platforms in the market at the moment. The company was founded back in 2006 and went public seven years later in 2013. The IPO was floated at $26 a share and ever since, the company has really struggled for revenue and performance consistency in the stock market.
However, Twitter has made a few changes in a bid to improve user experience. For example, last year the company increased the number of characters allowed in a tweet. The move was designed to help users express themselves better. It looks like these changes are having a positive effect, with the number of active daily users on the platform rising by 12%. The report also showed that the number of active monthly users was up by 4% to hit 330 million compared to a year before.
Twitter said that it has been using machine learning to customize targeted ads on the platform. Video ad sales were also up. The total revenue recorded during the period under review was $730 million. This was relatively higher compared to the $686 million that was predicted by Wall Street. Non-advertising revenue accounted for $87 million of the total. This was an increase of 10% compared to the same time last year.
Ad revenue was up 1% closing at $644 million. Total net profit recorded was $91 million. This was a massive turnaround since the company had reported a loss of $167.1 million for the previous year. The social media company is hoping to continue with this trend in the future.