Twitter, Inc. announced financial results for its third quarter 2017.

"This quarter we made progress in three key areas of our business: we grew our audience and engagement, made progress on a return to revenue growth, and achieved record profitability," said Jack Dorsey, Twitter's CEO. "We're proud that the improvements we're making to the product continue to bring people back to Twitter on a daily basis. It's our job to help people stay informed about what's happening in the world and what people are talking about, and we're focused on making our service faster, easier to use, and more relevant to more people every day."

"We're pleased with the improvements made toward a return to revenue growth this quarter," said Ned Segal, Twitter's CFO. "Our momentum was driven by improved execution from our sales team, strength in video and direct response ad formats, as well as in our data business, where we saw our third consecutive quarter of accelerating year-over-year growth. We also achieved record profitability in Q3, with a sequential improvement in our GAAP net margin and record adjusted EBITDA margins, reflecting improved prioritization and disciplined execution across our strategic priorities."

Third Quarter 2017 Operational and Financial Highlights

The company posted third quarter revenue of $590 million, a decrease of 4% year-over-year. Quarterly GAAP net loss was $21 million, representing a GAAP net margin of (4%) and GAAP diluted EPS of ($0.03). This compares with a quarterly GAAP net loss of $103 million, representing a GAAP net margin of (17%) and GAAP diluted EPS of ($0.15) in the same period last year.  

Quarterly non-GAAP net income was $78 million, or $0.10 per diluted share. This compares with a quarterly non-GAAP net income of $61 million, or $0.09 per diluted share in the same period last year.  

Adjusted EBITDA was $207 million or 35% of total revenue, compared to $181 million or 29% of total revenue in the same period last year.

Average MAU¹ was 330 million for the quarter, up 4% year-over-year and compared to 326 million in the previous quarter.  Average DAU grew 14% year-over-year, an increase from 12% year-over-year growth in the prior quarter and marking the fourth consecutive quarter of double-digit growth.

Outlook

For the fourth quarter, we expect:

• Adjusted EBITDA to be between $220 million and $240 million

• Adjusted EBITDA margin to be between 35% and 36%

• Capital expenditures to be no more than $110 million

• Stock-based compensation expense to be in the range of $90 to $100 million

We also expect that at the high end of our adjusted EBITDA range, we will likely be GAAP profitable.

Note that the company's outlook for the fourth quarter reflects foreign exchange rates as of October 16, 2017.