Twitter expects first-ever profit

SAN FRANCISCO: Twitter Inc said on Thursday it may become profitable for the first time next quarter after slashing expenses over the past year and ramping up deals to sell its data to other firms, which could help to break its reliance on advertising for revenue.

Shares of Twitter soared more than 18 per cent to US$20.31 (RM86.14) in afternoon trading. The company also said user growth resumed in the third quarter after stalling in the prior three months.

Twitter has never had a profitable quarter based on generally accepted accounting principles (GAAP), but said it “will likely be GAAP profitable” in the fourth quarter if it hits the high end of its estimates.

The social media company has struggled to convert its appeal among celebrities and public figures such as United States President Donald Trump to attract users and advertisers amid fierce competition from Facebook Inc and Snap Inc’s Snapchat.

It has worked in recent months to sign live-streaming deals and make other changes to improve user experience.

Revenue from data licensing and other sources in the third quarter was US$87 million, Twitter said, up 22 per cent from a year earlier. That helped cushion an eight per cent decrease in advertising revenue.

Twitter said it signed a “significant number” of enterprise deals in the third quarter, which would help stabilise its revenue flow. It did not name the firms it had inked deals with. Reuters