Twitter on Thursday reported a sharp rise in quarterly profits, lifted by gains in advertising, but its shares took a hit on a declining user base and a move to a new audience measure. The short-messaging platform said it posted a $255 million profit in the final three months of 2018, compared with $91 million a year earlier, as revenues rose 24 percent to $909 million.
But Twitter's base of monthly active users declined to 321 million - a drop of nine million from a year earlier and five million from the prior quarter.
Twitter said it would stop using the monthly user base measure and instead report "monetizable" daily active users in the US and worldwide, a better reflection of the audience viewing ads.
Using that measure, Twitter showed a base of 126 million worldwide, up nine percent over the year. That included 27 million in the United States and 99 million internationally.
This measure, Twitter said, is not "comparable to current disclosures from other companies, many of whom share a more expansive metric that includes people who are not seeing ads."
Chief executive Jack Dorsey said the results were "proof that our long-term strategy is working." "We enter this year confident that we will continue to deliver strong performance by focusing on making Twitter a healthier and more conversational service," he added.
Twitter shares sputtered and then fell sharply after the report, dropping as much as eight percent in pre-market trade.
Jasmine Enberg of the research firm eMarketer said the results were nonetheless positive.
"Twitter's Q4 earnings prove that the company is still able to grow its revenues without increasing its user base," she said. Twitter, which has struggled to keep up with fast-growing rivals like Facebook and Instagram, said it changed the measure for its user base to reflect "our goal of delivering value to people on Twitter every day and monetizing that usage."