Twitter delivered a stronger-than-expected update for the fourth quarter showing an expanded user base and growing ad revenue, sparking a rally in shares.

Net profit fell by half to $119 million but revenue rose 11 percent to top $1 billion for the first time.

Twitter's measure of its user base grew 21 percent from a year ago to 152 million, which the company said reflected improvements to the short messaging platform.

Chief executive Jack Dorsey said the results capped "a great year for Twitter" and reflected "our work to increase relevance and ease of use."

"Entering 2020, we are building on our momentum—learning faster, prioritizing better, shipping more and hiring remarkable talent," he said in a statement.

Shares in Twitter surged more than eight percent in pre-market trade following the update.

Twitter has been struggling to keep pace with bigger social networks like Facebook and Instagram and has sought to make the platform easier to use while filtering out abuse and manipulation.

Last year, the San Francisco tech firm said "bugs" in its software used to deliver targeted ads had dragged down revenue.

It has changed the way it measures its user base, now reporting only "monetizable daily active users," which rose sharply in the quarter.

That figure included 31 million in the United States and 121 million internationally, with both categories gaining.

"Twitter's strong performance in revenue shows advertisers are confident in the platform's reach despite some of the product issues earlier in the year," said eMarketer analyst Nazmul Islam.

"A reason for the confidence is probably continued growth of monetizable daily active users, which spiked up again in the fourth quarter."

Islam added that Twitter's moves to ban political ads and curb the spread of manipulated media such as "deepfake" videos, "should resonate positively with users and continue the growth in engagement in the next quarter."

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© 2020 AFP