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Image credit: Kacper Pempel / Reuters

Twitter closes in on its first-ever profitable quarter

User numbers are up, losses are down. Is Jack Dorsey's plan working?
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Kacper Pempel / Reuters

Twitter has updated the world on its financial position for the third quarter of this year, and the outlook is better than it has been for a while. The company has seen monthly active user figures increase, arresting the slide that it had to report across the summer. In addition, net losses have been trimmed down to just $21 million, and if Twitter can improve on its targets in the next three months, it may even turn a profit.

Back in July, the company was forced to admit that its user figures had stalled, with more than a million users quitting the site in just three months. Now, the company claims that it has 330 million monthly active users, 69 million of which are based in the US, up from 68 million in the last quarter. CEO Jack Dorsey believes that, with projects to improve the platform, like doubling character counts, Twitter is helping "bring people back to Twitter on a daily basis."

The company did have to concede that it had miscounted its user figures in the second quarter by between one and two million, which masked a drop in its overall total. As a consequence, the revised total for Q2 is now 326 million, but that has meant that it can claim to have added four million users in the last three months. It's a big deal for a company that has struggled to demonstrate meaningful growth, especially when compared to Facebook.

On the financial side, Twitter saw its overall quarterly revenue fall to $590 million, with advertisers reducing their spending on the platform. The company could, at least, be pleased that its data licensing division saw revenue increase to $87 million, an year-on-year increase of 22 percent. Expenses have also fallen, with Twitter claiming to have pushed down running costs by 16 percent year-on-year.

Looking toward the future, Twitter believes that its fourth-quarter will, if it outperforms its internal targets, turn a profit. That will see the burgeoning company report a positive income for the first time ever, and may prove to investors and the wider world that Jack Dorsey's plan to revive Twitter is worth persisting with.

Of course, the perpetual thorn in Twitter's side is the experience of actually using its service, and the way it handles its acceptable use policy. The company has had to fight a tidal wave of negative coverage, usually generated by its own poor handling of crises on its own network. Dorsey believes that moves to remedy this issue will be put in place by November 3rd, at which point hate groups and violent imagery are expected to be purged.

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