Twitter overstated monthly users for three years, but says it could finally turn a profit next quarter

Twitter beat Wall Street’s expectations for its third-quarter earnings and said it could finally turn a profit next quarter. But the company overstated monthly users for the past three years. Twitter still won’t reveal exactly how many daily users it has.

Twitter slightly beat Wall Street’s expectations for its third-quarter earnings but reported that it overstated monthly users since late 2014.

The company added four million additional monthly users during the third quarter and grew daily users by 14%, a much-needed improvement from the zero new users added during the previous quarter. Thanks to cost-cutting across the business, Twitter said it could finally turn a bottom-line, unadjusted profit in the fourth quarter.

But the embattled social network also revealed that it had miscalculated monthly users since the fourth quarter of 2014 by including third-party, text-based apps related to its shuttered developer platform, Fabric. As a result, it lowered previously-reported user numbers by one million for the fourth quarter of 2016 and two million for the first two quarters of 2017.

Despite the previously overstated metrics and 4% decline in ad revenue from this time last year, Twitter’s growth results and signs of approaching profitability sent shares soaring 12% in premarket trading on Thursday.

Twitter refused again to disclose its total number of daily users, a key growth metric the company has fought to withhold because it doesn't want to be compared to other social networks like Snapchat. During Thursday's earnings call with investors, CFO Ned Segal said that Twitter's daily active user number continues to be less than half of its monthly users.

Here are the key numbers from Twitter's Q3 earnings:

Earnings (adjusted): $0.10 a share versus $0.05 expected. Revenue: $590 million versus $587 million expected, down 4% from the year-ago period. Monthly active users: 330 million, up from 326 million in the previous quarter and an increase of 4% from the year-ago period. Daily active user growth: Up 14% from the year-ago period.