LONDON - Twitter said it could show its first-ever profit in the fourth quarter, after making sweeping cuts in expenses in the past few months and finding sources of revenue beyond the advertising that dominates social media.
Shares of the company jumped nearly 8% to $18.50 (R263.14) in premarket trading.
Twitter has never had a profitable quarter based on generally accepted accounting principles (GAAP), but it said yesterday, “we will probably be GAAP profitable” in the fourth quarter, if it reaches the high end of its own estimates. Twitter reported third-quarter revenue of $590 million, down 4% from $616m a year earlier.
It attributed much of the decrease to a previously announced decision to wind down its TellApart advertising product. Analysts had expected revenue of $587m.
San Francisco-based Twitter also disclosed in its quarterly earnings report that it had discovered an error in the way it had calculated the size of its user base since 2014 and revised its estimates downwards, but that the difference amounted to less than 1%.
The company said it had 330 million monthly active users in the quarter ended on September 30 - up 4 million from a quarter earlier, helped by greater use of email and notifications.
In the US, where growth had stalled earlier this year, the number of users rose to 69 million from 68 million, the company said. Analysts on average had expected 330.4 million monthly active users worldwide and 69 million in the US, according to financial data and analytics firm FactSet.
Twitter said the error in past user estimates was caused when it wrongly counted people who logged into applications associated with the firm’s Fabric software platform.