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A screen displays the stock price of Twitter above the floor of the New York Stock Exchange (NYSE) shortly after the opening bell in New York
Image: A screen displays the stock price of Twitter above the floor of the New York Stock Exchange (NYSE) shortly after the opening bell in New York. anuary 31, 2017. REUTERS/Lucas Jackson

Twitter Brings in a Quarterly Profit for the First Time

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Image: A screen displays the stock price of Twitter above the floor of the New York Stock Exchange (NYSE) shortly after the opening bell in New York. anuary 31, 2017. REUTERS/Lucas Jackson

For the first time in Twitter’s 12 year history, the company has managed to have a profitable quarter.

The micro blogging platform managed to swing a $91 million profit in the last quarter of 2017.

$732 Million in Q4 2017 Revenue

The $91 million in profit came from a total revenue of $732 million during that quarter. During that same span of time, growth had been slowing down, but its user numbers rose 4 percent year over year.

The company credits its first ever profit to a number of different efforts. Among them have included a serious crackdown on fake accounts. This was the reason it appeared as though its growth had stalled in the United States, as the accounts it eliminated offset many of those that were being newly created in the same months.

When comparing the company’s first quarterly profit to the year before, a significant turnaround can be seen. During the last quarter of 2016, the company lost $167 million.

Cost Cutting

Twitter has been making a concerted effort to cut costs over the last year after having only ever experienced losses throughout its twelve year lifetime.

At the same time that it experienced its first quarterly profit, it was also able to return to revenue growth. Among the primary drivers of that positive trend was the increase in its video ad sales. Twitter video ad sales increased by 2 percent year over year, which brought it to the $732 million total.

Equally, Twitter was able to shrink its annual loss when compared to the year before. In 2016, its annual loss was $457 million. Last year, it was a much lower loss of $108 million.

First Annual Profit

If Twitter, a company that went public five years ago, is correct in its own predictions, 2018 will represent its first year of profitability. When that news was first announced, its share prices spiked by a massive 20 percent.

Among its top concerns this year is in keeping up the growth of its legitimate user numbers. Despite the continued use by celebrities and politicians, Twitter has had to work hard to try to combat automated accounts (bots) and fake accounts, as well as spam.

Note: The opinions expressed in this article are the author's own and do not necessarily reflect the view of Alvexo on the matter.