Micro-blogging site Twitter Inc. (TWTR) on Wednesday reported a turnaround to profit in the first quarter on strong double-digit revenue growth. This is the company’s second quarterly profit. Both revenue and adjusted earnings per share beat analysts’ estimates. Twitter’s shares are rising more than 4 percent in pre-market activity.
Twitter’s average monthly active users or MAU figure rose 3 percent year-over-year and also increased from the preceding quarter.
Twitter’s first-quarter net income was $61.00 million or $0.08 per share, compared to net loss of $61.56 million or $0.09 per share in the year-ago period.
On an adjusted basis, earnings were $122.99 million or $0.16 per share, compared to net income of $53.23 million or $0.07 per share last year. On average, 31 analysts polled by Thomson Reuters expected earnings of $0.11 per share. Analysts’ estimates typically exclude special items.
Twitter noted that the most of the increase in adjusted earnings was due to the decline in the blended U.S. federal and state statutory tax rate as a result of the 2017 Tax Cuts and Jobs Act.
Revenues for the quarter grew 21 percent to $664.87 million from $548.25 million last year and beat analysts’ consensus estimate of $605.26 million.
The increase in revenues was driven by continued audience growth, differentiated ad product features, improved ROI, and better sales execution.
Twitter said its average monthly active users or MAU was 336 million in the quarter, up 3 percent year-over-year, and also up 6 million from 330 million in the prior quarter.
According to the company, MAU continued to be negatively impacted by changes made to Safari’s third-party app integration, which affected about 1 million MAU in the quarter, and by the company’s ongoing information quality efforts.
Twitter’s average daily active usage or DAU for the quarter grew 10 percent year-over-year, marking another quarter of double-digit growth.
Looking ahead to the second quarter, Twitter projects adjusted EBITDA between $245 million and $265 million.
However, the company warned that it faced increasingly difficult comparables in the second half of 2018 as it approaches the anniversary of the broad-based recovery that began in the second half of 2017.
As a result, Twitter continues to believe that its sequential growth rates for total revenue for the remainder of 2018 will resemble the sequential growth rates for total revenue in 2016.
by RTTNews Staff Writer
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