Twitter post quarterly revenue above $1bn for the first time

(qlmbusinessnews.com via news.sky.com– Fri, 6th Feb, 2020) London, Uk – –

User growth and revenue numbers delight investors but Twitter warns its costs are set to rise sharply in the current year.

Twitter has posted quarterly revenue above $1bn for the first time, helping its shares surge in early trading.

The platform's fourth quarter figures and its projections were largely seen as a bit of a mixed bag but the core numbers were positive after a lacklustre performance in the previous three months.

Total revenue came in at $1.01bn (£771m), up 11% on the same three-month period in 2018 – driven by a 12% increase in advertising sales, Twitter said.

There was further good news on user numbers – an area the company has focused on through attempts to bolster the user experience.

It said improvements to its machine-learning models to provide more relevant content and notifications contributed to a 21% surge in its core daily user metric, which hit 157 million.

Its efforts have included allowing people to follow topics and tackling abusive content more proactively.

Late last year, it also launched a feature for users to hide certain replies on their tweets.

But Twitter's profits fell short of expectations as costs rose.

Net income came in at $119m – a fall of more than 50% on the final quarter of 2018.

It also warned that costs were expected to rise by 20% in the current 2020 year – passing $1bn – as it hires more staff and creates a new data centre.

Shares were 15% higher on the NYSE in early trading – at their highest level since October last year.

The company's clean up efforts take place as America, its biggest market, prepares to go to the polls in November for what is likely to be a bitter presidential election that will see Donald Trump bid for a second and final term in office.

Twitter said it was prioritising efforts to protect the integrity of election-related conversations.

It banned political ads in November last year – as Britain prepared to go to the polls – amid growing pressure on social media companies to stop accepting ads potentially containing misleading or false information.

The company said this week it would apply “false” warning labels to tweets containing synthetic or deceptively edited forms of media and remove such media if it is likely to cause harm.

Neil Wilson, chief market analyst at Markets.com, said of the financial performance: “Twitter numbers look pretty darn good and a bounce back from a lacklustre third quarter characterised by a serious slowdown in revenue growth and technology problems with its ad targeting system.

By James Sillers