In the first sign that President Trump's favorite social network may be finally turning the corner, Twitter reported revenue, EBITDA and earnings all of which beat expectations, at revenues of $589.6MM (vs exp.$587.5MM), EBITDA of $207MM (vs exp.$161MM) and non-GAAP EPS of $0.10, better than the $0.06 expected. Monthly active users rose by 4% to 330 million in the third quarter, which while below the 330.5mm expected was still a welcome development for investors who last quarter saw a decline in the company's MAU and punished the stock appropriately.

Twitter - which shifted the company’s focus to videos and live events as a way to spur audience growth - attributed the user gains to changes making the platform easier to use, improved marketing and heightened awareness of Twitter from global events.

While the company said daily active users increased 14% from a year earlier, it declined to disclose the actual number. Twitter has argued that doing so would result in unfair comparison with Facebook, which has about 1.3 billion daily active users. Snap had 173 million daily active users in the second quarter. Aegis Capital Corp. estimates Twitter had 160 million daily active users in the quarter.

“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,” Dorsey said in the statement.

Unfortunately, this being twitter, not even good news could be reported without some big snafu, and sure enough Twitter admitted it has been incorrectly counting users of a service for third-party apps as active participants on the platform, all the way back to 4Q 2014. The difference was an extra 2 million "users" last quarter for example, not big but hardly reassuring. From the letter:

Reported average MAU refl ects adjustments for approximately 1-2 million users per quarter of certain third-party applications that were included as Twitter MAUs that should not have been considered MAUs in certain prior periods. DAU were not affected. Further details regarding the adjustment can be found in the section of this letter titled "Note About Our MAU Adjustment."

Predictably, Twitter was still unable to turn a profit, and reported its net loss narrowed to $21.1 million, or 3 cents a share, in the quarter. Profit excluding certain costs was 10 cents a share, compared with analyst estimates of 7 cents. Revenue declined 4.3 percent to $589.6 million. Analysts projected $587.5 million, according to data compiled by Bloomberg. Twitter says the better-than-expected sales were driven by its video advertising and data-licensing platforms.

More bad news: sales in the U.S., Twitter’s most important advertising market, fell 18% from the same period a year earlier. The company has failed to capture more than a tiny fraction of the digital advertising market, which is dominated by Alphabet Inc.’s Google and Facebook Inc. Total revenue growth was driven by international sales, which grew 6 percent from a year earlier.

This, however, was offset by good news about the company's Q4 EBITDA outlook which it expects to be $220 million to $240 million. Analysts projected $200 million. “We also expect that at the high end of our adjusted EBITDA range, we will likely be GAAP profitable,” Twitter said. The company hasn’t made a quarterly profit on that basis since going public in November 2013. For Q3, EBITDA was $207mm, vs Exp. of 4160.9MM

Overall the market seems to have liked the numbers and sent the stock soaring over 7% in premarket trading.