Besides Twitter announcing that they have decided to ban Russian media firms, Sputnik and RT from it’s advertising platform, the day is also notable for Twitter’s share price, jumping 15% with the information that it could be profitable by the end of the year.
Twitter managed to slim its quarterly losses to just $21 million in Q3 2017 despite a shrink in revenue, and its predictions for the final quarter of the year are even more optimistic.
From its letter to shareholders [PDF]:
For Q4, we expect:
• Adjusted EBITDA to be between $220 million and $240 million
• Adjusted EBITDA margin to be between 35% and 36%
• Capital expenditures to be no more than $110 million
• Stock-based compensation expense to be in the range of $90 million to $100 million
We also expect that at the high end of our adjusted EBITDA range, we will likely be GAAP profitable
In light of the latest Q3 results, the announcement went down well with the majority of investors who have become familiar with minimal growth and continual losses.
A major factor for Twitter’s potential profitability is that it is handing out less share-based compensation for employees, but there are other bright spots right now for Twitter. Total monthly users are growing (up four percent) and, while U.S. revenue dipped slightly in the last quarter, income from overseas grew by six percent.