Twitter Shares Jump After Reporting First GAAP Profitability Ever

I think it’s fair to say Jack Dorsey has finally proven himself to be a fine CEO, running two companies at once and creating massive amounts of shareholder value for both.

Shares of TWTR are higher by 23% this morning, after reporting solid results — achieving GAAP profitability for the first time in company history.

Jack’s other company, Square, is up 384% over the past two years. After today’s jump in Twitter, that stock will be up more than 100% the past year.

Twitter beats by $0.05, beats on revs; Achieved GAAP profitability for first time ever (26.91)
Reports Q4 (Dec) earnings of $0.19 per share, excluding non-recurring items, $0.05 better than the Capital IQ Consensus of $0.14; revenues rose 2.0% year/year to $731.6 mln vs the $686.12 mln Capital IQ Consensus.
Advertising revenue totaled $644 million, an increase of 1% year-over-year.
O&O advertising revenue totaled $593 million, an increase of 7% year-over-year.
Data licensing and other revenue totaled $87 million, an increase of 10% year-over-year. o US revenue totaled $406 million, a decrease of 8% year-over-year.
International revenue totaled $326 million, an increase of 17% year-over-year.
Total ad engagements were up 75% year-over-year.
Cost per engagement (CPE) was down 42% year-over-year.

Q4 adjusted EBITDA of $308 million, an increase of 43% year-over-year, representing an adjusted EBITDA margin of 42%, highest adjusted EBITDA margin to date and within long-term target range of 40-45%.

Users:
Average monthly active usage (MAU) was 330 million for Q4, an increase of 4% year-over-year and flat compared to the previous quarter.
Daily active usage grew 12% year-over-year.
Achieved GAAP profitability for the first time and delivered highest ever GAAP net income, adjusted EBITDA, and adjusted EBITDA margins in Q4. GAAP net income in Q4 reached $91 million with adjusted EBITDA of $308 million.

Outlook
Q1:
Adjusted EBITDA to be between $185 million and $205 million;
Adjusted EBITDA margin to be between 33% and 34%;
Stock-based compensation expense to be in the range of $100 million to $110 million.
FY2018:
Stock-based compensation expense to be in the range of $350 million to $450 million;
Capital expenditures to be between $375 million and $450 million.

Conversely, shares of YELP are lower by 11% on disappointing earnings. However, more or less, the social networking space is on fire, especially after SNAP set the tone yesterday with a 46% jump on better than expected results.