SAN FRANCISCO • Twitter posted a surprise gain in revenue, the first growth in four quarters, driven by improvements to its app and added video content that are persuading advertisers to boost spending on the social network.
The company topped analysts' average sales estimates in the fourth quarter and for the first time posted a real profit, a milestone in chief executive officer Jack Dorsey's turnaround effort.
The performance sent its stock soaring. Twitter's share price surged 15 per cent in early New York trading after closing at US$26.91 on Wednesday.
The number of monthly active users was little changed from the previous quarter at 330 million, a lower-than-projected total that the firm attributed in part to stepped-up efforts to reduce spam, malicious activity and fake accounts.
The report added to positive momentum in recent months for Twitter, which spent the second half of 2017 explaining how Russian-linked accounts - including automated bots - influenced content on its platform around the 2016 US presidential election.
Mr Dorsey has been working to broaden Twitter from a microblogging site into a destination for users to see "what's happening now" by striking live-streaming partnerships with news outlets and sports leagues.
People are spending more time on the platform with Twitter's focus on video, as well as a new algorithm that shows users the most relevant postings first, said BTIG analyst Richard Greenfield. "I think they've come a long way. The product has dramatically improved. They're doing a better job of showing the right tweets to the right people at the right time."
Twitter has been upgraded by at least six analysts since late October, fuelling a stock rally of more than 47 per cent in the past year. Revenue in the recent period rose 2 per cent from a year earlier to US$731.6 million (S$972 million).
Net income was US$91.1 million, or 12 US cents a share, marking the first time the firm reached profitability under generally accepted accounting principles. That compared with a loss of US$167.1 million, or 23 US cents, a year earlier. Profit excluding some costs was 19 US cents a share, exceeding projections for 14 cents.
BLOOMBERG