By David Ingram and Munsif Vengattil
(Reuters) – Twitter Inc
That outlook overshadowed the second profitable quarter in the 12-year-old company’s history, topping Wall Street estimates for revenue, profit and monthly active users, as advertisers in Asia and other markets outside the United States embraced its video ads.
Revenue growth for the remainder of 2018 will be similar to the slower rates of 2016, Twitter said. It said its tally of daily active users, a closely watched metric, grew 10 percent year-over-year, a slower pace of growth than the 12 percent to 14 percent maintained in recent quarters.
That slower user growth “has spooked investors,” Wedbush Securities analyst Michael Pachter said.
Twitter said it expected to increase its workforce by 10 percent to 15 percent in 2018 to make discussions on the service more civil, increase ad sales and meet other priorities. Twitter cut its headcount 6 percent last year.
Its shares traded down 5 percent around midday at $28.92 on the New York Stock Exchange. Through Tuesday’s close, they were up 26.9 percent this year, compared with a 1.5 percent decline in the S&P 500 Index <.SPX>.
Total revenue rose to $664.9 million, beating analysts’ expectations for $607.6 million, according to Thomson Reuters I/B/E/S.
Twitter swung to a net profit of $61 million, or 8 cents per share, in the first quarter, from a loss of $61.6 million, or 9 cents per share, a year earlier. Excluding items, the company earned 16 cents per share, topping the average analyst estimate of 12 cents per share.
U.S. President Donald Trump has kept the San Francisco-based service in the headlines, with his regular missives to his more-than-51 million followers, but Twitter has found more business success abroad growing its user base and ad sales.
International sales accounted for 48 percent of revenue, growing 53 percent year-over-year, compared with 2 percent growth in the United States.
“We are not that far away from international becoming more than half of revenue at Twitter,” Chief Financial Officer Ned Segal told analysts on a call, highlighting strength in Japan, Britain, Brazil and the Middle East.
The company said it added 5 million monthly users outside the United States and 1 million people in its home market, compared with the fourth quarter.
(Reporting by David Ingram in San Francisco and Munsif Vengattil in Bengaluru; Editing by Peter Henderson and Scott Malone)