“We reached a new milestone in Q4 with quarterly revenue in excess of $1 billion, reflecting steady progress on revenue product and solid performance across most major geographies, with particular strength in US advertising,” said Ned Segal, Twitter’s CFO, in a statement.
But rising costs during the quarter put a squeeze on the company’s net income.
As it looks to improve its appeal to users and drive further growth, Twitter plans to boost its headcount by 20% or more in 2020, especially in engineering, product, design, and research. That and other factors in turn are likely to increase costs and expenses for the year approximately 20%, Twitter said.
Like other social media sites, Twitter has grappled with misinformation and disinformation spreading on its service. Though it’s taken down fake accounts, Twitter hasn’t gotten the problem under control. Recently, Twitter users spread false claims about the coronavirus and electoral fraud ahead of the Iowa caucuses.
Twitter has made high-profile attempts to address these problems. In a series of tweets last year, Twitter CEO Jack Dorsey said the company would ban political ads because reach “should be earned not bought.” The move distinguished Twitter from social media heavyweight Facebook, which puts almost no limits on what politicians can say on its platform. Twitter doubled down on its efforts to combat misinformation this week, saying it will begin labeling — and in some cases removing — manipulated media in March. The policy covers deepfakes, videos that use artificial intelligence to make it seem like someone is saying or doing something they didn’t.
Twitter is also testing other features that could drive more positive conversations on the site. The company rolled out a tool to hide replies globally in November, allowing users to filter out irrelevant, off topic or hurtful remarks. The social network plans to experiment with a new feature that would give users the ability to choose who can reply to their tweets.
In the quarter ended in December, Twitter brought in $1.01 billion in revenue, up 10 percent from a year earlier and beating the $996.73 million projected by analysts in a Thomson Reuters survey. For the current quarter, the company expects revenue to be between $825 million and $885 million.
The company earned 15 cents per share in the fourth quarter, falling short of expectations of 18 cents per share. Excluding stock-based compensation and other expenses, the company earned 17 cents per share, below projections of 29 cents per share.
That shortfall stemmed in part from a 22% jump in costs during the quarter compared with the same period a year ago.
Twitter said the number of monetizable daily active users — people who log into the site daily and see ads — hit 152 million in the fourth quarter, compared to 126 million in the same period last year.
The company’s stock rose more than 5% in early trading to around $35.30 per share.