Twitter shares came roaring out of the gate this morning after the company reported strong third-quarter results and predicted it would finally turn a profit by next quarter.
The stock gained 15% in early trading, reaching $19.70 a share, within about a dollar of its 52-week high. Before the trading session, the company posted third quarter revenue of $590 million, a dip of 4% from the year-ago period. Net losses narrowed to $21 million from $103 million.
The company reported adding 4 million monthly users and increased daily users by 14% during the third quarter, both marked improvements over the flat user growth in the previous quarter. At the same time, though, Twitter divulged it has been overstating the number of users since 2014. Beginning in the fourth quarter of that year, it incorrectly included third-party, text-based apps related to a now-defunct developer platform. That led execs to lower previously reported user tallies by 1 million in the fourth quarter of 2016 and two million for the first half of 2017.
“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 CEO Jack Dorsey. “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.”
While its platform is integral to media and entertainment companies — not to mention American presidents — Twitter as a company remains a bit of a puzzle. Disney said earlier this year that it had looked closely at Twitter as a potential acquisition before ultimately passing.