Twitter reported fourth-quarter revenues up 24 percent year-on-year to USD 909 million. Adjusted EBITDA jumped to USD 397 million from USD 302 million, better than the company's outlook. Monthly active users continued to fall, as the company cleaned up its user base, but Twitter said daily users were still growing, as its focuses more on monetisable users.
Average MAU in Q4 were 321 million, a decrease of 9 million year-over-year and down 5 million quarter-over-quarter. The same as the previous quarter, Twitter said this was due to product changes that reduced the number of email notifications sent, as well as decisions to prioritize the health of the service and not use paid SMS carrier relationships in certain markets, and to a lesser extent, the EU's data protection law. MAU declined both in the US and at the international operations.
Average monetisable daily active users reached 126 million in Q4, up 9 percent year-over-year, driven by a combination of organic growth, marketing, and product improvements, Twitter said. The company saw double-digit growth in mDAU in five out of its top 10 global markets during the quarter. The company plans to use mDAU as the key metric going forward and said it will stop reporting MAU after Q1 2019.
Twitter's net profit also improved strongly in Q4, to USD 244 million from USD 141 million a year earlier. This was also its first full-year net profit in 2018, at USD 255 million or 33 cents a share. Adjusted free cash flow rose to USD 263 million in Q4, and the group ended the year with total cash of USD 6.2 billion.
20% increase in costs
For 2019, Twitter said the health of the conversation on its platform remains its top priority. This along with investments in product, sales and platform will lead to an expected 20 percent increase in GAAP and cash operating expenses in 2019. Capital expenditure will also increase again, to USD 550-600 million, after a 73 percent rise in 2018 to USD 487 million.
For Q1, Twitter forecast revenues of USD 715-775 million, up from a reported USD 665 million a year earlier. Going forward it will give guidance on GAAP operating profit rather than EBITDA, and the figure is estimated at USD 5-35 million in Q1. Operating profit totaled USD 207 million in Q4, after a 13 percent annual increase in operating costs.
