Twitter: Achieved profitability for the first time in 4Q17, and daily active users maintained double-digit growth for five consecutive quarters

Twitter released its 4Q17 financial report, marking the company's first GAAP profit. Daily active users continued to grow by double digits, and advertising revenue seemed to have successfully bottomed out.

Monthly active user growth slowed down, but daily active users maintained double-digit growth

Twitter's fourth quarter 2017 financial report showed that monthly active users (MAU) increased by 4% year-on-year to 330 million, and remained unchanged from the previous quarter.

Twitter attributed the month-on-month stagnation in monthly active users to: first, the change in Safari third-party application integration, which had a negative impact of 2 million, of which 1 million were in the United States and 1 million were in the international market; the second reason was the typical seasonal impact, which had a negative impact in the fourth quarter; the third reason was its cleanup of fake accounts and malicious behavior.

Daily active users (DAU) grew 12% year-on-year, slightly lower than last month's growth rate, and has maintained double-digit growth for five consecutive quarters. Twitter attributed the growth in DAU to the continued improvement of the product, which led to increased user interaction and retention.

Advertising performed well, turning from year-on-year decline to positive growth

In the fourth quarter, Twitter's total revenue achieved positive growth for the first time, up 2% year-on-year to $732 million, of which advertising revenue increased 1% year-on-year to $644 million, and data licensing revenue increased 10% year-on-year. The O&O portion of advertising revenue (ads sold by Twitter itself) increased 7% year-on-year to $592 million.

Although advertising revenue has grown well, the cost per interaction of advertising is still on a downward trend year-on-year, with the cost per interaction of advertising in 4Q17 falling 42% year-on-year. To a certain extent, this shows that advertisers' costs are decreasing and ROI is increasing, which often means that Twitter may have better room for growth in the future.

Looking at advertising revenue by region, year-on-year revenue growth in North America has basically stagnated, while revenue from overseas has grown by 18%, now accounting for nearly half of the revenue.

In the fourth quarter, thanks to the growth in revenue and the release of operational efficiency, the proportion of various income expenses to revenue decreased, which also led to a significant improvement in Twitter's overall profitability and achieved GAAP positive profit.

The company achieved a GAAP net profit of US$91 million, turning a profit for the first time under US Generally Accepted Accounting Principles. The company's gross profit margin, operating profit margin and net profit margin reached 70%, 15% and 12% respectively.

Adjusted EBITDA profit reached US$308 million, a year-on-year increase of 43%.

In the fourth quarter, the company's focus on live broadcast + Twitter business continued to make good progress. There were more than 1,140 live broadcasts, with viewers outside the United States accounting for more than 60%. 22 content partners were added, 9 of which were global partners.

As for the impact of the controversial change in Twitter's text limit from 140 to 280 characters, the company has seen positive results: "People did abandon tweets less, and we saw more engagement. We saw more retweets and quotes, we saw people getting more attention and replies. So we believe this is minimizing complexity and clutter on the platform. In general, it's more about enabling people to be more expressive and share their ideas; giving people more space has proven to be helpful."

via: 199IT Financial Report Data Center