Since launching in March 2006, Twitter finally makes a profit! The failing social media platform has announced that in the last 3 months of 2017 $91 million was made, against a revenue of $731 million. It’s also the first time the business has reported revenue growth in the past four quarters.
What’s interesting about this is Twitter didn’t get there by growing its business, it got there by cutting costs. The three main categories that faced a cut:
Stock awards given to employees as part of their salary- down $138 million compared to last year.
Research and development- their budget went down from $120.3 million to $78.3 million.
Sales and marketing- $70 million less was spent on sales and marketing.
In addition to this, Twitter’s revenue slightly grew over the year by 2%, it would’ve been an 8% growth if you ignore that some of Twitter’s 2016 revenue came from a marketing platform that no longer exists. It didn’t add any new users since the previous quarter, maintaining its monthly user count of 330 million. The company assumed the lack of growth could be down to its clampdown on fake accounts.
CEO of Twitter Jack Dorsey said, “We’re investing to make 2018 a year of growth and expect our expense to more closely align with revenue after a year of significant margin improvement”. Twitter fully intends on making 2018 a successful year and to become much wiser with their spending.
Good luck Twitter.