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Surprise! Twitter Actually Turns a Profit This Quarter

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I do love Twitter, but at the same time, I dislike that it provides Donald Trump with a way to start new wars.  That said, Twitter has announced that they actually turned a net profit for the first time in the company’s history.  That’s incredible.  Maybe they can thank Trump for that boost in revenue?  What’s interesting though, is that the number of Twitter users has taken a hit.  Twitter recently conducted a huge purge where they went through and got rid of a bunch of fake accounts.

While this is going to be helpful when it comes to hatred and fake news being spread, what will this do for Twitter?  Well, based on my previous paragraph, this might be good news for Twitter, since they are finally turning a profit.  But we all know that the industry is measured by the number of daily active users.  And technically, Twitter hasn’t been completely honest with those figures.  That’s not to say that Twitter did this intentionally, however, that’s the outcome.

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Twitter CEO, Jack Dorsey had this to say:   “Q4 was a strong finish to the year.  We returned to revenue growth, achieved our goal of GAAP profitability, increased our shipping cadence, and reached five consecutive quarters of double-digit DAU growth. I’m proud of the steady progress we made in 2017, and confident in our path ahead.”

This is all great news as Twitter has been burning through money for years now.  Turning a profit this past quarter is actually shocking skeptics.  The only question is whether or not they can continue to pull this off again.  Even if it’s not in this quarter, maybe another one?  Is the answer more daily active users?  According to Dorsey, Twitter has had five consecutive quarters of double-digit daily active user growth.  To be clear, when he says double-digit, he isn’t referring to the actual numbers of users, but rather a percentage.  Which is substantial if you think about it.

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Since the 4th quarter of 2016, the rate has been fairly consistent with some dips, but nothing major. Should this leave investors worried? I don’t think so.  I think that because part of Twitter’s strategy for the last quarter was getting rid of some dead weight, it’s actually going to help them in the long run.  This kind of move is going to help legitimize the platform.  I think that people are skeptical about using social media platforms because of everything that has happened in the last year and a bit.  And they should be if I’m being honest.

Twitter is making an example out of some users, like Baked Alaska, a neo-Nazi who attended the white supremacist rally in Charlottesville, Virginia, last year that left one woman dead. The story of Baked Alaska, whose real name is Tim Gionet, showed just how dangerous fringe online communities can become when they push their hate into the real world, as we saw in Charlottesville. If Twitter can continue this work, as well as start to implement some other changes, I think they will continue to turn that profit.  Which is great news for Dorsey and his investors.