Twitter is inching closer to a significant milestone in its journey, wherein it will be posting quarterly profit for the first time. The social media company said that the possibility of a quarterly profit has been brought about by extensive cost cutting exercises, a jump in Twitter users and finding new sources of revenue. With the announcement, stock prices of Twitter rallied by around 8 percent to close at $18.50 in premarket trading. It may be recalled that Twitter has never registered a profitable quarter, as per the Generally Accepted Accounting Principles (GAAP). Speaking about the recent developments, Twitter said that the company is close to becoming GAAP profitable in the fourth quarter. It will happen if the company achieves the high end of its financial predictions.
In the third quarter, Twitter had posted revenue of $590 million. This was however 4 percent less than the figure of $616 million in the year-ago period. The fall in the third quarter was largely due to the decision to shut down its advertising product called TellApart. Twitter said that its total users have also risen by 4 million at the end of the quarter ending September 30. On this date, total Twitter users were 330 million. To boost its revenues, Twitter is focusing on other sources of income such as data licensing and enterprise contracts. These are in addition to the advertising revenues that Twitter earns through its social media platform.