The Jack Dorsey Portfolio Delivered Mixed Results This Quarter

Square Inc SQ shares are up more than 12 percent on Thursday after the company reported Q4 earnings that exceeded the market’s expectations.

The latest earnings reports from Square and Twitter Inc TWTR reveal that the top two names in the Jack Dorsey portfolio appear headed in opposite directions.

Square reported quarterly revenue of $5451.9 million, up 21 percent from a year ago. Twitter, on the other hand, reported revenue of just $717.2 million representing lackluster growth of only 1 percent compared to a year ago. The latest revenue numbers from Twitter continue the trend of at least eight consecutive quarters of declining growth. Just four quarters ago, Twitter was still reporting revenue growth above 35 percent.

Related Link: Facebook's Revenue Growth Rate 50x That Of Twitter

While Twitter’s revenue appears to be peaking, its income is nowhere near where it needs to be. Incredibly, despite 319 million monthly active users, Twitter reported a negative net income of -$457.8 million in 2016.

Of course, Square burned through its fair share of cash in 2016 as well, reporting a negative net income of -$179.8 million for the year. However, shareholders have rewarded Square for its growth so far in 2017, sending shares higher by more than 25 percent year-to-date.

In summary, neither Square nor Twitter is profitable, but Square shareholders have reason for optimism given the company’s 20 percent revenue growth. Without growth, profits or a convincing plan for the future, Twitter investors don’t have much of a bull case at the moment.

Image Credit: By (CC) Brian Solis, www.briansolis.com / bub.blicio.us, CC BY 2.0, via Wikimedia Commons