Twitter shares have climbed after the social network beat revenue expectations by posting its first billion-dollar quarter, shrugging off fears it could be facing a slowdown in advertising.
The company reported fourth quarter revenues of $1.01bn (£780m) on Thursday, above a consensus of $996.7m and at the very top of the company’s own forecast range. Shares rose more than 8% in early trading on the New York Stock Exchange as investors breathed a sigh of relief as the company rebounded following a poor third quarter.
In October, Twitter’s share price plunged almost 20% when revenues came in lower than expected as the company blamed issues including bugs in its mobile app advertising system.
The key metric of “monetisable” daily user numbers – those to whom it serves ads – hit a record 152 million in the fourth quarter, up 21% year-on-year and ahead of the 147.5 million expected by analysts.
“We reached a new milestone in the fourth quarter with quarterly revenue in excess of $1bn, reflecting steady progress on revenue product and solid performance across major geographies, with particular strength in US advertising,” said Ned Segal, Twitter’s chief financial officer.
Advertising revenue rose 12% to $885m in the fourth quarter: US advertising revenue totalled $509m, up 20% year-on-year; international ad revenue grew at a more sedate 3% to $375m.
The company said international growth was steady but had been held back by ongoing “headwinds” relating to its mobile advertising tech and an issue, now resolved, relating to targeting. In October, Twitter reported it had been using personal data to target adverts without the correct user permissions. It turned off the features when it found the bugs, denting its ability to sell targeted ads.
Last year the group said it would stop accepting paid political ads globally, ramping up pressure on Facebook to follow suit ahead of the US presidential elections.
The Twitter chief executive, Jack Dorsey, who visited every Twitter office last year and plans to spend as much as six months in Africa this year, said he was committed to globalising his workforce.
“We have to build a company that is not as dependent on San Francisco,” he said. “We need to figure out how to build a company that is [internationally] distributed, not burdened by time zones but advantaged by them. As we look forward, we’re reaching a talent pool that expects a lot more remote work and expects to work outside of California and outside of San Francisco, and we should be building a company around that.”
Twitter said its headcount grew by 24% last year as it added 900 new employees to take its global total to 4,800. Headcount is expected to grow by 20% “or more” this year.
“Twitter numbers look pretty darn good and a bounceback from a lacklustre third quarter,” said Neil Wilson, the chief market analyst at Markets.com. “It’s also encouraging that Twitter is executing on its strategy in a quarter when [Snapchat] struggled and Facebook also found life tougher.”
