Twitter, the suffering social media platform, which was recently up for grabs on the market, has today released its third quarter earnings report. And we’re pleasantly surprised. Though the company gave us a reason to be extremely worried by rescheduling its earning call to 4 a.m but has posted better-than-expected quarterly earnings. Way to go, Twitter!
The third quarter earnings call of the micro-blogging platform has exceeded lowly Wall Street expectations. CEO Jack Dorsey is quite the cheeky man. He first got us worried, but then amazed us with the much-needed growth signs and figures.
Twitter has reported an earning of 13 cents per share and a revenue figure of $616 million as compared to analyst estimates of earnings-per-share of 9 cents on revenue of $606.5 million. This shows that the company managed to grow 8 percent when compared to the same time last year. The non-GAAP net income was reported at $92 million as compared to $67 in the previous year.
Advertising revenue totaled at $545 million, an increase of 6 percent year-over-year from $513 million last year. Over 90 percent of total ad revenue for the platform was sourced from mobile advertisements. The company has also been able to lower ad load as a result of improving auction dynamics and daily active usage.
The stagnant userbase, which is the primary concern of investors, also grew to 317 million monthly users — about 4 million more than the previous quarter. This is also a 3 percent uptick in average monthly active users(MAUs) when compared on a yearly basis. Mobile MAUs account for over 83 percent of the total users active in a month. Twitter also sheds light on the daily active users(DAU) figures, which are now growing 7 percent year-over-year.
In addition, if you’re unaware, Twitter had been the center of attention for investors these past weeks because of its possible acquisition by one of the potential bidders — Google, Disney, Apple and Salesforce. But, all suitors exited the deal which was soured by the problem of hate speech and trolls on the platform. Nobody wanted to be involved in that mess.
Thus, Twitter still has the task of operating as an individual entity, so it has confirmed its restructuring plans along with a 9 percent reduction in workforce. This restructuring effort will primarily affect the company’s global sales, partnerships, and marketing teams. It is intended to create a greater focus on efficiency to achieve the ultimate goal of profitability by 2017.
Commenting on the same, Twitter CFO Anthony Noto, says,
We’re getting more disciplined about how we invest in the business, and we set a company goal of driving toward GAAP profitability in 2017. We intend to fully invest in our highest priorities and are de-prioritizing certain initiatives and simplifying how we operate in other areas. Over time, we will look to invest in additional areas, as justified by expected returns and business results.
Due to the pleasant growth shown in quarterly numbers delivered by Twitter, the investors will definitely feel a little relaxed. They’re already responding to the turn-around in this earning call as the share prices have started surging by over 4 percent in pre-market hours. The investors are releasing the long-bound air of tension surrounding the fate of the company.