Shares of Twitter are soaring, up more than 21% in trading Wednesday morning, after the social-media company reported better-than-expected fourth-quarter results including its first quarterly profit.
Twitter reported revenue of $731.6 million — 6.6% above the $686.4 million that Wall Street had expected. The company earned an adjusted $0.12 a share, missing the $0.14 that Wall Street was anticipating.
While quarterly revenue rose just 2% year-over-year, Twitter managed to cut costs by 28%, resulting in the company’s first profitable quarter — a goal CEO Jack Dorsey laid out on an earnings call last February.
“Q4 was a strong finish to the year,” Dorsey said in a press release. “We returned to revenue growth, achieved our goal of GAAP profitability, increased our shipping cadence, and reached five consecutive quarters of double digit daily active user growth. I’m proud of the steady progress we made in 2017, and confident in our path ahead.”
Twitter has struggled to raise its stock price above 2015 levels in the face of claims it didn’t take adequate steps to combat harassment on the platform and stagnant active user counts. It ended 2017 with 300 million monthly active users, the same as the previous quarter, but posted a 12% uptick in daily active users compared to the previous year.
This was the company’s first report following the rollout of 280-character tweets to every user Twitter user, a move it hoped would increase engagement and time spent on the platform.
Wall Street now has an average target price of $21.77 for the stock — 45% below the stock’s opening price of $34.45 Thursday.