Twitter beats Q4 profit estimates but active users decline

Twitter says it has 126 million daily users

Twitter's MAUs declined 9% year over year to 321 million.

Twitter, for the first time, revealed the number of its monetizable daily active users: 126 million. These are users who see ads on the platform and log in at least once a day.

"2018 is proof that our long-term strategy is working", chief executive Jack Dorsey said in a statement.

The reasoning is that a less-toxic Twitter should benefit its standing with ad buyers in the long term.

Shares were down more than 10 percent at $30.56 in midday trading.

"At first glance, we are encouraged by ongoing positive revenue and mDAU ("monetizable" DAU) trajectory with strong Q4 results; however, management's guidance suggests higher levels of platform investment amid a slowdown in revenue growth", Sebastian wrote in a note Thursday to investors. The midpoint of that range was below analysts' average estimate of $765 million, according to IBES data from Refinitiv.

Those higher costs could eat into Twitter's future earnings, some analysts said.

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Twitter is making more money than ever before-even as it loses monthly active users.

Operating expenses were expected to surge about 20 percent year-on-year in 2019 due to efforts to improve its service, exceeding analysts' average estimate of 12 percent. Twitter reported a record-setting revenue of $909 million in the fourth quarter, a 24-percent increase compared to this time a year ago.

Twitter's 24 percent year-over-year revenue increase (26 percent on constant currency basis) makes it clear the company is able to show revenue growth despite a declining user base, according to eMarketer Senior Analyst Jasmine Enberg. And Twitter's numbers trail far behind that of Facebook, which reported 1.52 billion daily users in for the fourth quarter of 2018 despite having a shitshow of a year.

Twitter rarely talks about the number of Daily Active Users, saying that it's a poor metric that would easily be misinterpreted.

Twitter is a publicly-traded company, and as such, its quarterly earnings reports always include data about the platform - including the amount of active users. Total advertising revenue was up 23% quarter-on-quarter to $791m, with video ads representing more than half of sales.

Twitter has made its first annual profit in its 13-year history but another fall in the number of its users and a disappointing sales forecast took the gloss off the results and sent its shares down almost 10 per cent.

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