Twitter Inc. posted sales that beat estimates and added more new monthly users indicating the social network could be in a revival mode after struggling for so long trying to attract new users and advertisers. Shares of the social media giant surged on the news.
Twitter has battled the perception it is a niche platform, despite its emergence as the favorite tool for communication for U.S. President Donald Trump.
The company said that its monthly active users increased 4% to just over 330 million during its third quarter, which was a strong sign for its investors who look at audience size as one of Twitter’s biggest measures for long-term health.
Daily active Twitter users increased by 14%, the fourth straight quarter of growth in double digits, said the company in its Thursday prepared statement.
CEO Jack Dorsey shifted the focus of the company to live events and video to spur on user growth. Twitter has attributed its user gains to the changes that make the platform easier to navigate, improved marketing as well as heightened awareness of the social media platform due to global events.
Twitter posted a net loss that narrowed to just $21.1 million equal to 3 cents per share for the quarter. Profit excluding specific items reached 10 cents per share, in comparison to estimates by analysts of 7 cents per share.
Revenue was down 4.3% ending the quarter at $589.5 million. Analysts were expecting revenue of $587.5 million. Twitter said its better than had been expected sales had been driven by data-licensing platforms and video advertising.
Sales in the United States, the most important advertising market for Twitter, were down 11% from the same three months one year ago. The company had not yet been able to capture more than just a small fraction of today’s market of digital advertising, which Facebook and Google dominate.
Growth in total revenue was driven by its international sales, which increased 6% from the same period one year ago.
The microblogging platform gave an outlook for the fourth quarter for its adjusted earnings period to interest, depreciation, amortization and tax of between $220 million and $240 million. Analysts were projecting just $220 million.
Shares of Twitter were up 7.4% on the news in premarket trading on Wall Street. The stock has increased by 5.2% in 2017.
Twitter announced that it adjusted the monthly active users number back to the 2014 fourth quarter after it determined it incorrectly counted users for third party apps.