Twitter jumped more than 9% in premarket trading as the company beat expectations on revenue, and gave higher Q4 guidance than Wall Street was expecting.
The company, which reported its third quarter earnings before the bell on Thursday, said in its guidance for next quarter suggested if they hit the high end of its adjusted EBITDA estimates of between $220 million to $240 million estimates it could be GAAP profitable.
- Revenue: $590 million vs. $586.7 million, according to a Thompson Reuters consensus estimate
- EPS (non-GAAP diluted): 10 cents vs. 6 cents, according to a Thompson Reuters consensus estimate
- Monthly active users (MAUs): 330 million vs. 330.4 million, according to Street Account
“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,” said Twitter’s CEO Jack Dorsey 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.”
Twitter reported its highest adjusted EBITDA this past quarter, with total non-GAAP expenses down 10 percent year over year or 35 percent of total revenue. Total GAAP expenses down 16 percent from this quarter last year to $582 million.
It also announced it had to readjust its monthly active users (MAUs) all the way back to the fourth quarter of 2014 because it had accidentally counted users of a third party app service as its own.
The company, which reported its third quarter earnings before the bell on Thursday, said in a letter to shareholders it found out it was counting users of a third party ad service which should not have been included. The miscalculations only amounted to no more than 1 to 2 million users each quarter, they noted.
As a result its latest quarter’s MAUs were 330 million, slightly below the Street Account estimate of 330.4 million. The company added 4 million MAUs since last quarter in light of the adjustments, a growth rate of 4 percent year over year.
The daily active user (DAU) count was not affected and grew 14 percent since this time last year.
Despite the MAUs snafu, Twitter beat analysts expectations on revenue and earns per share. Though advertising revenue declined 8 percent year over year, data licensing and other revenue increased 22 percent over the same time period.
Source: Tech CNBC
Twitter jumps more than 9% as it nears first profitable quarter