Twitter made a significantly smaller profit in its fourth quarter than it did last year, due to an increase of expenses. That reality didn’t much dampen investors’ mood on Thursday as they sent the shares up 7% in pre-market trading. The Nasdaq, however, is almost flat.
Fourth-quarter net income was $182 million, which is down from $222 millions. It didn’t offer any specifics about what led to the surge in costs: Expenses topped $1.4 billion, a 35% increase. Wall Street had figured Twitter’s profit would actually increase—to $290 million.
Sales, though, matched Wall Street expectations: $1.7 billion, which will likely further ease concerns that changes to Apple’s iOS software will hurt Twitter’s digital ads business, still its core business.
For the year, Twitter stayed in the red, losing $220 million—down over $1 billion last year—while bringing in $5.1 billion in sales.
Twitter is currently in transition. Parag, chief technology officer, took over from Jack Dorsey as CEO in November. Agrawal faces the responsbility of follow through on Dorsey’s bid to greatly increase Twitter’s revenue and daily users, growing the latter to over 300 million by the end of next year. Twitter has launched several subscription-based services to help achieve both. These include Spaces (audio chat), and Super Follows, which is a paywall that surrounds content.
“Our strong 2021 performance positions us to improve execution and deliver on our 2023 goals,” Agrawal said in a statement about the quarterly financials. To deliver better personalization and selection to our audiences, advertisers and partners, we are now more focused and organized.
Twitter makes some positive strides. In the fourth quarter, Twitter’s users grew 13% to 217 million.