As Twitter announced its earning for Q3 2017, the stock prices of the company started soaring.
Twitter’s share prices jumped 15 percent in early trading as news that it could be profitable before the end of this year surfaced.
This quarter, Twitter managed to shave its quarterly losses to just $21 million, despite a shrink in revenue. The company, in its letter to shareholders said:
“For Q4 we expect:
• Adjusted EBITDA to be between $220 million and $240 million
• Adjusted EBITDA margin to be between 35 percent and 36 percent
• 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.”
For the third quarter, Twitter posted a 4 percent year-over-year dip to $590 million in revenue, indicating an improvement from the second quarter’s 5 percent annual drop. Additionally, Twitter’s revenue landed at the high end of the implied revenue outlook calling for a range from $500 to $600 million. “Revenue outperformance was driven by better sales execution, continued strength in video and improving DR ad momentum,” wrote Colin Sebastian, analyst at Baird.
Ad revenues may have experienced an 8 percent year-over-year decline to $503 million, but Twitter’s performance nonetheless topped the Wall Street’s estimate of $498 million, thanks to spend from top 100 global advertisers seeing a 23 percent year-over-year surge. Non-GAAP EBITDA of $207 million was quite a strong point, rising high past consensus of $158.7 million and the guide of $130 to $150 million, which Sebastian attributes to revenue upside coupled with a shift in timing of certain expenses into Q4.