WHAT’S HAPPENING? Twitter has been miscounting user growth since 2014.. But, “It still delivered for Wall Street,” and the company “thinks it might achieve profitability by the end of the year.”
It’s a bizarre scenario in what was an otherwise modest earnings report. Twitter reported $590 million in revenue for the quarter, a decline of 4 percent year-over-year. That marks the third straight quarter of year-over-year revenue declines. Wall Street expected the company to generate $587 million last quarter.
One positive sign: It finally expects to turn a profit by the fourth quarter — that’s bottom line profit. It stands to reason since Twitter reported the lowest quarterly loss in Q3, about $21 million, than it has in three years.
One big reason for potential profitability: Twitter is spending much less on stock-based compensation for employees than it was a year ago. Twitter spent $101 million on stock-based compensation last quarter, down 36 percent from a year ago.
Twitter’s operating expenses are still too high for what probably ought to be a low-overhead microblogging service.