Twitter stock soars with profitability hopes

By Barry Eitel

SAN FRANCISCO (AA) – Shares of Twitter soared over 18 percent on Thursday after the company reported that it expects to be profitable for the first time ever during the next fiscal quarter.

Twitter released its third quarter earnings report in the morning, revealing that it posted a revenue of $590 million for the quarter. Although this is a four percent decrease compared to the same period last year, Twitter says that it believes it will soon be profitable according to generally accepted accounting principles (GAAP).

Since Twitter went public in 2013, it has never posted a profit.

The number of monthly active users, though, actually grew four percent compared to the third quarter of 2016 to 330 million.

“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,” Jack Dorsey, Twitter's chief executive, said in a statement. "We're proud that the improvements we're making to the product continue to bring people back to Twitter on a daily basis. It's our job to help people stay informed about what’s happening in the world and what people are talking about, and we're focused on making our service faster, easier to use, and more relevant to more people every day.”

After the report was released, Twitter’s stock ascended 18.49 percent to close at $20.31 per share.

Total advertising revenue decreased eight percent compared to the same time last year to $503 million, but revenue from data licensing and other sources increased 22 percent to $87 million. Revenue in the United States was $332 million, a decrease of 11 percent, but revenue from elsewhere in the world increased six percent to $258 million.

“We're pleased with the improvements made toward a return to revenue growth this quarter," Twitter’s CFO Ned Segal said in a statement. "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.”