The social-media company’s black ink was its first since going public in 2013.

Share story

SAN FRANCISCO — Twitter often feels like the digital equivalent of a swamp.

The Russians used the platform to disrupt the 2016 election. Famous people buy fake followers to make themselves seem more famous. Prominent members of the chattering class have been signing off for good. Sometimes it seems as if no one loves the service except for the president of the United States.

As a business, however, Twitter might finally be starting to work.

On Thursday, it reported a profit in the fourth quarter, the first black ink since going public in 2013. The news pushed its shares up 12 percent to $30.18 — their highest level in more than two years — on a day of broad, sharp declines in the stock market.

“We did what we said we were going to do,” an exultant Jack Dorsey, Twitter’s chief executive, said on Twitter. “Our focus and self-discipline continues to improve.”

It’s a measure of the undisciplined — OK, brutal — nature of Twitter that most of the replies to Dorsey’s tweet were not congratulations but insults and criticism. Others were incomprehensible.

What counts, however, is that those cranks and critics are there in the first place. The number of people who use the service monthly rose 4 percent to 330 million, which — while not a big increase — is something. Those who use the social-media service every day grew 12 percent from the fourth quarter of 2016, the fifth consecutive quarter of double-digit gains.

“The user growth is kind of astounding,” said Rich Greenfield, a media and tech analyst at the research firm BTIG, who has been recommending the stock for a year. “They were barely growing two years ago.”

Twitter originally showed tweets in reverse chronological order — the latest posts, however mundane, were on top. Now it is using algorithms to try to show the most important tweets first, making the site more engaging.

“If you show the right tweets to the right person at the right time, it creates user happiness,” Greenfield said. “That means more time spent on the site, which means more opportunities for advertising.”

This has been a good week for social-media companies that are not Facebook. On Tuesday, Snap reported much better revenue than expected, and a slightly narrower loss. Its shares also soared on the news. In contrast, Facebook said last week that it had made changes that reduced the hours its 2 billion users were spending on its pages.

Overall, Twitter reported a profit of $91 million in the final three months of 2017, compared with a loss of $167 million a year earlier. Margins were much better, expenses were lower and stock-based compensation decreased sharply.

Other numbers were not as impressive. Revenue rose 2 percent to $732 million in the quarter. Revenue from advertising, which makes up the bulk of its revenue, increased 1 percent. In general, Twitter exceeded low expectations.

“A solid result across the board and builds upon the momentum” from the third quarter, analysts at UBS wrote in a research note.

One quarter is not much of a streak, and Twitter has often been unable to keep it up. Jim Cridlin, global head of innovation at Mindshare, a unit of the advertising giant WPP, said that while Twitter’s momentum continued into the fourth quarter, the company still faced “significant headwinds.”

Leadership is one issue. Dorsey splits his time between Twitter and his other company, the digital-payments firm Square. Last month, Anthony Noto, Twitter’s chief operating officer and one of Dorsey’s most trusted deputies, left the company to become chief executive of the embattled online lender Social Finance.

Twitter also faces criticism as federal and state authorities scrutinize companies that sold millions of fake followers on social-media platforms. More than a million followers of entertainers, athletes and others have disappeared after an article by The New York Times detailed the business practices of a company called Devumi. Twitter previously said it would take action against Devumi’s practices.