Twitter nears first profitable quarter as it slashes expenses

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This file photo shows logos of US online news and social networking service Twitter. AFP

(Reuters) – Twitter Inc said yesterday it could turn its first ever profit in the fourth quarter, after making sweeping cuts in expenses the past few months and finding sources of revenue beyond the advertising that dominates social media.

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San Francisco-based Twitter also disclosed in its quarterly earnings report that it had discovered an error in the way it had calculated the size of its user base since 2014 and revised its estimates downward, but that the difference amounted to less than 1 percent.

Twitter reported third-quarter revenue of $590 million, down 4 percent from $616 million a year earlier. The company attributed much of the decrease to a previously announced decision to wind down its TellApart advertising product.

Analysts on average had expected revenue of $587 million, according to Thomson Reuters I/B/E/S.

The company said it had 330 million monthly active users in the quarter that ended on Sept. 30, up 4 million from a quarter earlier, helped by greater use of email and push notifications to point people toward tweets they want to read.

In the US, where growth had stalled earlier this year, the number of users rose to 69 million from 68 million, the company said.

Analysts on average had expected 330.4 million monthly active users worldwide and 69 million in the US, according to financial data and analytics firm FactSet.

Twitter said the error in past user estimates was caused when it wrongly counted people who logged into applications associated with the company’s Fabric software platform, which Twitter sold this year to Alphabet Inc’s Google.

Investors and analysts have at times criticized Twitter for how it describes the size of its user base, which is a key metric for social media companies. Unlike Facebook Inc, Twitter does not disclose how many daily active users it has.

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