At nearly 12 years old, and after four years as a public company, Twitter has finally had a profitable quarter. The company said today that it made $91 million during the fourth quarter of 2017, whereas it lost $167 million this time in 2016. Twitter advised investors late last year that it was closing in on its first profitable quarter in large part by cutting costs.
Profitability isn’t the only good news for Twitter this quarter: its revenue also started growing again, rising to $732 million, up 2 percent from $717 million this time in 2016. During the rest of 2017, revenues had declined by 4 to 8 percent year over year. It’s not entirely clear what changed to reverse that, but it’s possible that advertisers were wary to spend money on the platform amid major harassment issues that Twitter began to address in a more serious way as the year went on.
There remains one clear sore spot at Twitter, though: monthly users. While monthly users grew by 4 percent year over year, they stalled quarter over quarter, staying at 330 million total. Worse, the number of monthly users actually shrunk in the US, falling from 69 million to 68 million. That’s the second time in just one year that US users dipped. The only reason overall user growth has continued is because it remains slow but steady internationally. Clearly, Twitter’s had a hard time getting new people on board this year — and convincing existing ones that it’s worth sticking around.
Twitter blames some of the dip on an undescribed change to Safari’s third-party app integrations. Because of this change to Safari, Twitter says it lost 2 million monthly users, half of whom were in the US. Changes to tweets have apparently helped growth, though. Twitter says rolling out 280-character tweets encouraged users to spend more time on the platform and return more often.
We are committed to making Twitter safer, and we are clarifying our policies, improving our enforcement, and communicating more clearly. #TWTR
— Twitter Investor Relations (@TwitterIR) February 8, 2018
Twitter has struggled in recent years with user growth and product focus. While those problems are far from solved — Twitter remains small compared to competitors, particularly those under Facebook’s umbrella, like Instagram, which has 800 million monthly users — today’s earnings could still offer investors additional confidence in the direction that Jack Dorsey has led the company since returning to it as CEO a little more than two years ago. The company is profitable and its revenue is heading in the right direction once again. Now for the perpetual issue: getting people to understand and use Twitter.