Twitter said on Thursday that its profits rose sharply in the fourth quarter, lifted by gains in advertising despite a drop in its global user base.
The short-messaging platform said it posted a $255 million profit in the final three months of 2018, compared with $91 million a year earlier, as revenues rose 24% to $909 million, helped by growth in its video advertising business.
Total advertising revenue rose 23% to $791 million. More than half that revenue came from video ads placed by corporate clients.
Revenue from data licensing and other non-advertising businesses rose 35 percent from a year earlier to $117 million.
Twitter’s base of monthly active users also declined to 321 million – a drop of nine million from a year earlier and five million from the prior quarter.
The social media company said its monthly active users declined due in part to its campaign of deleting millions of abusive accounts after facing criticism it was being used as a platform for political manipulation and hate speech.
Twitter also said it would stop using the monthly user base metric and instead report “monetizable” daily active users in the United States and worldwide from the next quarter.
Using that measure, Twitter showed a base of 126 million worldwide, up 9% from 115 million a year ago and up from 124 million in the previous quarter.
“2018 is proof that our long-term strategy is working,” said chief executive Jack Dorsey “Our efforts to improve health have delivered important results, and new product features like a single switch to move between latest and most relevant tweets have been embraced by the people who use Twitter. We enter this year confident that we will continue to deliver strong performance by focusing on making Twitter a healthier and more conversational service.”
Jasmine Enberg of the research firm eMarketer said the earnings were positive.
“Twitter’s Q4 earnings prove that the company is still able to grow its revenues without increasing its user base,” she said “The falloff in monthly active users is likely a continuation of Twitter’s efforts to remove questionable accounts.”
Twitter, which has struggled to keep up with fast-growing rivals like Facebook and Instagram, said it changed the measure for its user base to reflect “our goal of delivering value to people on Twitter every day and monetizing that usage.”
Twitter said it expects operating expenses to rise about 20% year-on-year in 2019 due to efforts to improve its service, above analysts’ average estimate of 12%.
It expects capital expenditures to be between $550 million and $600 million, well above analysts’ average estimate of $415 million for 2019.
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