Twitter has achieved quarterly GAAP profitability for the first time in its history, according to the company's combined financial report for Q4 and Fiscal 2017.
Results for the full fiscal year showed a mild decline. The bulk of Twitter's revenue continues to come from advertising. In fiscal 2017, this amounted to $2.1 billion, compared to $2.2 billion in fiscal 2016. Other revenue, including "data licensing," was reported as $333 million in fiscal 2017, and $282 million in fiscal 2016. Total revenue came to $2.4 billion in fiscal 2017, a 3% decrease compared to $2.5 billion in fiscal 2016. Fiscal 2017 showed a GAAP net loss of $108 million.
However, Q4 itself was stronger, with a 7% year-over-year increase in ad revenue and 2% increase in total revenue. Twitter reports that aside from an $82 million year-over-year impact from its deprecated TellApart product, revenue was approximately flat compared to fiscal 2016. GAAP net income in Q4 reached $91 million. GAAP net margins reached 12%, and adjusted earnings (EBITDA - before interest, taxes, depreciation and amortization) reached 42%, which Twitter says is within its "long term target range" of 40-45% for the first time.
Total revenue in Q4 was $732 million, of which $644 million was from advertising, up by 1% vs Q4 2016. US revenue in Q4 was down 8% year-over-year, to $406 million, while international revenue was up 17%, to $326 million.
Twitter's Daily Active Users (DAU) count grew 12% year-over-year, with five consecutive quarters showing double-digit year-over-year growth. Average monthly active usage (MAU) was now reported as 330 million, 68 million of them in the US. Total live-streamed events reached 1,150, with 22 new partnerships.
Twitter gave no specific reason for the improvement in Q4, stating only that it was "driven by continued strong engagement growth, improved revenue features, improved ROI and better sales execution."
Twitter does note that the past year has seen usability improvements, making it easier for people to "discover and talk about what's happening on Twitter," making it easier to thread Tweets, and expanding the character limit for Tweets to 280 characters "for more people around the world."
Twitter also reports that its advertising cost per engagement (CPE) in Q4 declined by 42% on a year-over-year basis, while overall add engagements increased by 75%. It notes that its advertising platform team made optimizations to ad serving logic that brought a 26% increase in ad engagement rates and an 18% increase in return for advertisers.
The company's priorities going forward will include improving ad offerings "through better performance and measurement, including ad platform improvements, self-serve measurement studies and third-party accreditation." It will also be working to tap into "new channels of demand," including online video, as well as "introducing new ways to buy ads."