Shares of Twitter are shooting up, rising over 9% in after-hours trading, after the company came out way ahead of revenue estimates in its fourth quarter earnings, which were released on Thursday.
The stock had gone up only 1.33%, or $0.54, in regular trading to finish at $41.26 a share.
The company posted quarterly revenue of $479 million, up 97% year-to-year, handily beating analyst expectations of $453.1 million. Twitter reported non-GAAP EPS of $0.14, easily beating the $0.06 expected by analysts.
"We closed out the year with our business advancing at a great pace. Revenue growth accelerated again for the full year, and we had record quarterly profits on an adjusted EBITDA basis," Dick Costolo, CEO of Twitter, said in a statement. "In addition, the trend thus far in Q1 leads us to believe that the absolute number of net users added in Q1 will be similar to what we saw during the first three quarters of 2014."
Even as it outperformed financially, Twitter continued to struggled in the one area that has been giving it trouble in recent quarters: user growth.
In Q4, Twitter saw its average monthly active users (MAUs) grow only 20% year-to-year to 288 million, That reflects a loss of approximately 4 million net Monthly Active Users in the fourth quarter due to changes in third party integrations. Mobile MAUs represented 80% of the company's total MAUs.
Timeline views reached 182 for the fourth quarter of 2014, an increase of 23% year-over-year.
For once, though, it seems like the company made enough money offset investor fears over its stagnating user growth.
Once again, almost all of Twitter's revenue came from advertising, which accounted for $432 million, a 97% year to year increase. Mobile advertising revenue was 88% of total advertising revenue. Advertising revenue per thousand timeline views reached $2.37 in the fourth quarter of 2014, an increase of 60% year-over-year.
Data licensing, and other revenue, came to $47 million, an increase of 105% year-over-year. Of Twitter's total revenue, $164 million, or 34%, was international, an increase of 149% year-over-year.
GAAP net loss was $125 million for the quarter, compared to a net loss of $511 million in the same period last year.
Twitter is projecting revenue of between $440 and $450 million, with adjusted EBITDA in the range of $89 million to $94 million, for the next quarter. For the full year 2015, it expects to see revenue between $2.3 billion to $2.35 billion, with an adjusted EBITDA in the range of $550 million to $575 million.
Last quarter the company had projected revenue of between $440 and $450 million for Q4, and revenue between $1.365 billion and $1.375 billion for the full year.
(Image source: thenextweb.com/twitter)
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Twitter is an online information network that allows anyone with an account to post 140 character messages, called tweets. It is free to sign up. Users then follow other accounts which they are interested in, and view the tweets of everyone they follow in their "timeline." Most Twitter accounts are public, where one does not need to approve a request to follow, or need to follow back. This makes Twitter a powerful "one to many" broadcast platform where individuals, companies or organizations can reach millions of followers with a single message. Twitter is accessible from Twitter.com, our mobile website, SMS, our mobile apps for iPhone, Android, Blackberry, our iPad application, or 3rd party clients built by outside developers using our API. Twitter accounts can also be private, where the owner must approve follower requests.
Twitter started as an internal project within the podcasting company Odeo. Jack Dorsey, and engineer, had long been interested in status updates. Jack developed the idea, along with Biz Stone, and the first prototype was built in two weeks in March 2006 and launched publicly in August of 2006. The service grew popular very quickly and it soon made sense for Twitter to move outside of Odea. In May 2007, Twitter Inc was founded.
Our engineering team works with a web application framework called Ruby on Rails. We all work on Apple computers except for testing purposes.
We built Twitter using Ruby on Rails because it allows us to work quickly and easily--our team likes to deploy features and changes multiple times per day. Rails provides skeleton code frameworks so we don't have to re-invent the wheel every time we want to add something simple like a sign in form or a picture upload feature.
There are a few ways that Twitter makes money. We have licensing deals in place with Google, Yahoo!, and Microsoft's Bing to give them access to the "firehose" - a stream of tweets so that they can more easily incorporate those tweets into their search results.
In Summer 2010, we launched our Promoted Tweets product. Promoted Tweets are a special kind of tweet which appear at the top of search results within Twitter.com, if a company has bid on that keyword. Unlike search results in search engines, Promoted Tweets are normal tweets from a business, so they are as interactive as any other tweet - you can @reply, favorite or retweet a Promoted Tweet.
At the same time, we launched Promoted Trends, where companies can place a trend (clearly marked Promoted) within Twitter's Trending Topics. These are especially effective for upcoming launches, like a movie or album release.
Lastly, we started a Twitter account called @earlybird where we partner with other companies to provide users with a special, short-term deal. For example, we partnered with Virgin America for a special day of fares on Virginamerica.com that were only accessible through the link in the @earlybird tweet.
What's next for Twitter?
We continue to focus on building a product that provides value for users.
We're building Twitter, Inc into a successful, revenue-generating company that attracts world-class talent with an inspiring culture and attitude towards doing business.