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Why Twitter Stock Jumped Today

By Joe Tenebruso - Updated Feb 10, 2021 at 6:22PM

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The social network delivered impressive growth in the final quarter of 2020.

What happened

Shares of Twitter (TWTR 1.89%) rose sharply on Wednesday following the release of the popular messaging platform's fourth-quarter results. 

As of 3 p.m. EST, Twitter's stock price was up more than 12%.

So what

Twitter's revenue surged 28% year over year to $1.29 billion, fueled by strong user growth in international markets. The social media company's monetizable daily active usage (mDAU) -- essentially, the number of people who logged in and accessed Twitter's apps -- climbed 27% to 192 million.

Advertising dollars follow eyeballs, and Twitter's ad revenue rose 31% to $1.15 billion. "Advertisers are benefiting from new ad formats, stronger attribution, and improved targeting," Twitter Chief Financial Officer Ned Segal said in a press release.

A rising bar chart as a series of increasingly taller glass cylinders.

Twitter delivered solid user and revenue growth in the fourth quarter. Image source: Getty Images.

Better still, Twitter is becoming more profitable as it scales its revenue base. Its operating income soared 65% to $252 million, as its operating margin expanded to 20%, up from 15% in the year-ago quarter.

Now what

Looking ahead, Twitter expects to generate revenue of $940 million to $1.04 billion in the first quarter of 2021. Meanwhile, management anticipates an operating loss of as much as $50 million, as Twitter ramps up hiring and increases its investments in technology to support its growth initiatives.

"Our product changes to date are promoting healthier conversations for those who use our service, including advertisers and partners, and we are excited about our plans to continue innovating in 2021," CEO Jack Dorsey said.

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