For the first time in Twitter’s history the company has reported a net profit which caused the stock price to rise more than 15 percent on Thursday, currently at US$30.18. With this improvement analysts are even suggesting that Twitter may well be targeted as an acquisition.
For the fourth quarter, Twitter reported a modest revenue increase to US$731.6 million. Compared to a loss of US$167 million it experienced for the same period in 2016, the company is improving. Twitter currently generates revenue through video ad sales.
Earnings were US$0.19 cents per share, an increase from the US$0.14 cents that analysts predicted. Daily active users (DAU) increased by 12 percent, EBITDA margins improved significantly from US$215 million in the previous year, which accounted for nearly a third of revenue, compared to US$308 million for 2017, which represented 42 percent of revenue.
Twitter blamed its lack of ability to increase its users on the fact that it had to rid the social media page of fake accounts, seasonality and purging the social media site from conspiracy theorists and white supremacists.
Twitter still has a long way to go if it wants to compete with social media giants like Facebook and Instagram. However, with its improvement in revenue and net profit, the company has positioned itself for greater things in 2018. For us though, Twitter is not a screaming buy.
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