Twitter Inc (NYSE:TWTR) wrapped up a productive year with excellent fourth-quarter results, marking the first GAAP-profitable quarter in the company’s history. Revenue of $732 million was up 8% from a year ago when excluding the $40 million impact from TellApart (which is now fully depreciated), and this translated into GAAP earnings per share of 12 cents.
Monthly active users of 330 million were flat from the previous quarter and up 4% from a year ago but more importantly daily active usage grew 12% from a year ago marking the fifth consecutive quarter of double-digit growth in this metric.
Twitter Stock By the Numbers
Management has kept a tight rein on expenses which is helping the bottom line. The continued focus on bringing stock-based compensation (SBC) down more in line with its peers is starting to have a notable impact as well.
SBC as a percentage of revenue for all of 2017 hit 17.8%, down from 24.3% a year ago, and it continues to come down.
But it’s not just cost controls that are having an impact. Platform enhancements (280 characters, live video, etc.) continue to stoke engagement, and investments in features and measurement for ad clients is helping to get the business growing again. Ad engagements were up 75% while cost per engagement declined 42% from a year ago. Wisely management is focused on keeping users well-informed and engaged daily with the belief that this will continue to bring in new users as time goes on.
The focus of the past few years centering on right-sizing the business and developing a long-term sustainable strategy appears to be paying off. Management expects the business to be GAAP-profitable for 2018 and this may mark a widespread change in sentiment on the business going forward.
As of this writing, Jason Moser, a senior analyst for The Motley Fool’s flagship real-money portfolio service, Million Dollar Portfolio, held shares of TWTR.