Twitter Announces Third Quarter 2019 Results
Reports 17% Year-over-Year Growth in Monetizable Daily Active Usage and 9% Year-Over-Year Growth in Total Revenue
SAN FRANCISCO, Oct. 24, 2019 /PRNewswire/ -- Twitter, Inc. (NYSE: TWTR) today announced financial results for its third quarter 2019.
"We drove strong growth in monetizable DAU (mDAU), up 17% year-over-year, driven by ongoing product improvements. We're continuing to improve relevance while testing ways to make it easier for people to find what they are looking for on Twitter," said Jack Dorsey, Twitter's CEO. "We also continue to make progress on health, improving our ability to proactively identify and remove abusive content, with more than 50% of the Tweets removed for abusive content in Q3 taken down without a bystander or first person report."
"Despite its challenges, this quarter validates our strategy of investing to drive long-term growth. More work remains to deliver improved revenue products. We'll continue to prioritize our ad products along with health and our investments to drive ongoing growth in mDAU," said Ned Segal, Twitter's CFO. "We remain confident that focusing on our most important priorities, and delivering higher performing, better ad formats will deliver better outcomes for all of our stakeholders for years to come."
Third Quarter 2019 Operational and Financial Highlights
Except as otherwise stated, all financial results discussed below are presented in accordance with generally accepted accounting principles in the United States of America, or GAAP. As supplemental information, we have provided certain non-GAAP financial measures in this press release's supplemental tables, and such supplemental tables include a reconciliation of these non-GAAP measures to our GAAP results.
- Revenue totaled $824(1) million, an increase of 9% year-over-year. Performance was impacted by revenue product issues, which we believe reduced year-over-year growth by 3 or more points, along with greater-than-expected seasonality.
- Advertising revenue totaled $702 million, an increase of 8% year-over-year.
- Total ad engagements increased 23% year-over-year.
- Cost per engagement (CPE) decreased 12% year-over-year.
- Data licensing and other revenue totaled $121 million, an increase of 12% year-over-year.
- US revenue totaled $465 million, an increase of 10% year-over-year.
- International revenue totaled $358 million, an increase of 7% year-over-year.
- Costs and expenses totaled $780 million, an increase of 17% year-over-year, resulting in operating income of $44 million and 5% operating margin.
- Net income was $37 million, representing a net margin of 4% and diluted EPS of $0.05. In the same period last year, net income was $789 million, representing a net margin of 104% and diluted EPS of $1.02. Also in the same period last year, excluding the release of deferred tax asset valuation allowances of $683 million, adjusted net income was $106 million, representing an adjusted net margin of 14% and adjusted diluted EPS of $0.14.
- Average monetizable daily active usage (mDAU) was 145 million, compared to 124 million in the same period of the previous year and compared to 139 million in the previous quarter.
- Average US mDAU was 30 million, compared to 26 million in the same period of the previous year and compared to 29 million in the previous quarter.
- Average international mDAU was 115 million, compared to 98 million in the same period of the previous year and compared to 110 million in the previous quarter.
Outlook
Our guidance for Q4, as in prior quarters, reflects the most likely range of outcomes based on our current visibility. We have considered the rebound in our advertising business in September, the strength of our bookings, and the organic events and product and service launches expected in Q4, along with the lingering headwinds we expect from the previously discussed revenue product issues we experienced in Q3. While we are taking steps to remediate these issues, we expect them to continue to weigh on the overall performance of our advertising business in the near term.
Specifically, we expect that, on a combined basis, moderated performance in our Mobile Application Promotion (MAP) product and the previously discussed issues in our personalization and data settings will likely result in 4 or more points of reduced year-over-year growth for total revenue in Q4, up from 3 or more points of impact in the third quarter. The increase reflects a full-quarter impact in Q4 vs. only a partial-quarter impact in Q3. These headwinds are incorporated in our outlook.
For Q4, we expect:
- Total revenue to be between $940 million and $1.01 billion
- Operating income to be between $130 million and $170 million
For FY 2019, we expect:
- Capital expenditures to be at or near the low end of our previous guidance range of $550 million to $600 million
- Stock-based compensation expense to be at or near the midpoint of our previous guidance range of $350 million to $400 million
Note that our outlook for Q4 2019 reflects foreign exchange rates as of October 2019.
For more information regarding the non-GAAP financial measures discussed in this press release, please see "Non-GAAP Financial Measures" and "Reconciliation of GAAP to Non-GAAP Financial Measures" below.
Appendix
Third Quarter 2019 Webcast and Conference Call Details
Twitter will host a conference call today, Thursday, October 24, 2019, at 5am Pacific Time (8am Eastern Time) to discuss financial results for the third quarter of 2019. The company will be following the conversation about the earnings announcement on Twitter. To have your questions considered during the Q&A, Tweet your question to @TwitterIR using $TWTR. To listen to a live audio webcast, please visit the company's Investor Relations page at investor.twitterinc.com. Twitter has used, and intends to continue to use, its Investor Relations website and the Twitter accounts of @jack, @nedsegal, @Twitter, and @TwitterIR as means of disclosing material nonpublic information and for complying with its disclosure obligations under Regulation FD.
Fourth Quarter Earnings Release Details
Twitter will release financial results for the fourth quarter and fiscal year of 2019 on February 6, 2020, before the market opens at approximately 4am Pacific Time (7am Eastern Time). On the same day, Twitter will host a conference call to discuss those financial results at 5am Pacific Time (8am Eastern Time).
About Twitter, Inc. (NYSE: TWTR)
Twitter is what's happening in the world and what people are talking about right now. From breaking news and entertainment to sports, politics, and everyday interests, see every side of the story. Join the open conversation. Watch live-streaming events. Available in more than 40 languages around the world, the service can be accessed via twitter.com, an array of mobile devices, and SMS. For more information, please visit about.twitter.com, follow @Twitter, and download both the Twitter and Periscope apps at twitter.com/download and periscope.tv.
A Note About Metrics
Twitter defines monetizable daily active usage or users (mDAU) as Twitter users who logged in or were otherwise authenticated and accessed Twitter on any given day through twitter.com or Twitter applications that are able to show ads. Average mDAU for a period represents the number of mDAU on each day of such period divided by the number of days for such period. Changes in mDAU are a measure of changes in the size of our daily logged in or otherwise authenticated active user base. To calculate the year-over-year change in mDAU, we subtract the average mDAU for the three months ended in the previous year from the average mDAU for the same three months ended in the current year and divide the result by the average mDAU for the three months ended in the previous year. Additionally, our calculation of mDAU is not based on any standardized industry methodology and is not necessarily calculated in the same manner or comparable to similarly titled measures presented by other companies.
The numbers of active users presented in our earnings materials are based on internal company data. While these numbers are based on what we believe to be reasonable estimates for the applicable period of measurement, there are inherent challenges in measuring usage and user engagement across our large user base around the world. Furthermore, our metrics may be impacted by our information quality efforts, which are our overall efforts to reduce malicious activity on the service, inclusive of spam, malicious automation, and fake accounts. For example, there are a number of false or spam accounts in existence on our platform. We have performed an internal review of a sample of accounts and estimate that the average of false or spam accounts during the third quarter of 2019 represented fewer than 5% of our mDAU during the quarter. The false or spam accounts for a period represents the average of false or spam accounts in the samples during each monthly analysis period during the quarter. In making this determination, we applied significant judgment, so our estimation of false or spam accounts may not accurately represent the actual number of such accounts, and the actual number of false or spam accounts could be higher than we have estimated. We are continually seeking to improve our ability to estimate the total number of spam accounts and eliminate them from the calculation of our active users, and have made improvements in our spam detection capabilities that have resulted in the suspension of a large number of spam, malicious automation and fake accounts. We intend to continue to make such improvements. After we determine an account is spam, malicious automation or fake, we stop counting it in our mDAU, or other related metrics. We also treat multiple accounts held by a single person or organization as multiple users for purposes of calculating our active users because we permit people and organizations to have more than one account. Additionally, some accounts used by organizations are used by many people within the organization. As such, the calculations of our active users may not accurately reflect the actual number of people or organizations using our platform.
In addition, our data regarding user geographic location for purposes of reporting the geographic location of our mDAU is based on the IP address or phone number associated with the account when a user initially registered the account on Twitter. The IP address or phone number may not always accurately reflect a user's actual location at the time such user engaged with our platform. For example, a mobile user may appear to be accessing Twitter from the location of the proxy server that the user connects to rather than from a user's actual location.
We regularly review and may adjust our processes for calculating our internal metrics to improve their accuracy. Our measures of user growth and user engagement may differ from estimates published by third parties or from similarly-titled metrics of our competitors due to differences in methodology.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements generally relate to future events or Twitter's future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "should," "expects," "plans," "anticipates," "going to," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential," or "continue," or the negative of these words or other similar terms or expressions that concern Twitter's expectations, strategy, priorities, plans, or intentions. Forward-looking statements in this press release include, but are not limited to, statements regarding Twitter's future financial and operating performance, including its outlook, guidance and statements regarding future disclosures as well as the factors expected to affect future financial and operating performance; Twitter's expectations regarding its strategies, product, and business plans, including its priorities, product initiatives, and product experiments; Twitter's strategies for improving the health of the platform and improving safety; and Twitter's strategies and expectations for increasing audience growth, including delivering more relevant content, and advertiser value. Twitter's expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include the possibility that: Twitter's user base and engagement do not grow or decline; Twitter's strategies, priorities, or plans take longer to execute than anticipated; Twitter's products and product features do not meet expectations or contain bugs; Twitter is unable to detect and remediate bugs in a timely manner; advertisers reduce or discontinue their spending on Twitter; data partners reduce or discontinue their purchases of data licenses from Twitter; and Twitter experiences expenses that exceed its expectations. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in Twitter's Annual Report on Form 10-K for the fiscal year ended December 31, 2018, and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2019 and June 30, 2019, each filed with the Securities and Exchange Commission. Additional information will also be set forth in Twitter's Quarterly Report on Form 10-Q for the quarter ended September 30, 2019. The forward-looking statements in this press release are based on information available to Twitter as of the date hereof, and Twitter disclaims any obligation to update any forward-looking statements, except as required by law.
Non-GAAP Financial Measures
To supplement Twitter's financial information presented in accordance with generally accepted accounting principles in the United States of America, or GAAP, Twitter considers certain financial measures that are not prepared in accordance with GAAP, including revenues excluding foreign exchange effect, which we refer to as on a constant currency basis, non-GAAP income before income taxes, non-GAAP provision (benefit) for income taxes, non-GAAP net income, non-GAAP diluted net income per share, adjusted EBITDA, non-GAAP costs and expenses, adjusted net income, adjusted net margin, adjusted diluted net income per share, and adjusted free cash flow. In order to present revenues on a constant currency basis for the fiscal quarter ended September 30, 2019, Twitter translated the applicable measure using the prior year's monthly exchange rates for its settlement currencies other than the US dollar. Twitter defines non-GAAP income before income taxes as income before income taxes adjusted to exclude stock-based compensation expense, amortization of acquired intangible assets, non-cash interest expense related to convertible notes, non-cash expense related to acquisitions, impairment (gain) on investments in privately-held companies, restructuring charges and one-time nonrecurring gain, if any; Twitter defines non-GAAP provision (benefit) for income taxes as the current and deferred income tax expense commensurate with the non-GAAP measure of profitability using the estimated annual effective tax rate, which is dependent on the jurisdictional mix of earnings; and Twitter defines non-GAAP net income as net income adjusted to exclude stock-based compensation expense, amortization of acquired intangible assets, non-cash interest expense related to convertible notes, non-cash expense related to acquisitions, impairment (gain) on investments in privately-held companies, restructuring charges and one-time nonrecurring gain, if any, and adjustment to income tax expense based on the non-GAAP measure of profitability using the estimated annual effective tax rate, which is dependent on the jurisdictional mix of earnings. Non-GAAP diluted net income per share is calculated by dividing non-GAAP net income by GAAP diluted share count. Twitter defines adjusted EBITDA as net income adjusted to exclude stock-based compensation expense, depreciation and amortization expense, interest and other expense, net, provision (benefit) for income taxes, restructuring charges and one-time nonrecurring gain, if any. Twitter defines non-GAAP costs and expenses as total costs and expenses adjusted to exclude stock-based compensation expense, amortization of acquired intangible assets, non-cash expense related to acquisitions, restructuring charges and one-time nonrecurring gain, if any. We have presented adjusted net income solely to exclude the benefit related to the establishment of deferred tax assets for corporate structuring for certain geographies in the nine months ended September 30, 2019 and related to the release of a deferred tax asset valuation allowance in the three and nine months ended September 30, 2018, and no other adjustments were made in the calculation of these measures. Adjusted net margin is calculated by dividing adjusted net income by GAAP revenue. Adjusted diluted net income per share is calculated by dividing adjusted net income by GAAP diluted share count. Adjusted free cash flow is GAAP net cash provided by operating activities less capital expenditures (i.e., purchases of property and equipment including equipment purchases that were financed through finance leases, less proceeds received from the disposition of property and equipment).
Twitter is presenting these non-GAAP financial measures to assist investors in seeing Twitter's operating results through the eyes of management, and because it believes that these measures provide an additional tool for investors to use in comparing Twitter's core business operating results over multiple periods with other companies in its industry.
Twitter believes that revenues excluding foreign exchange effect, non-GAAP income before income taxes, non-GAAP provision (benefit) for income taxes, non-GAAP net income, non-GAAP diluted net income per share, adjusted EBITDA, non-GAAP costs and expenses, adjusted net income, adjusted net margin, and adjusted dilutive net income per share provide useful information about its operating results, enhance the overall understanding of Twitter's past performance and future prospects, and allow for greater transparency with respect to key metrics used by Twitter's management in its financial and operational decision-making. Twitter uses these measures to establish budgets and operational goals for managing its business and evaluating its performance. Twitter believes that revenues on a constant currency basis is a useful metric that facilitates comparison to its historical performance. Twitter believes that non-GAAP net income, non-GAAP diluted net income per share, adjusted EBITDA, non-GAAP costs and expenses, adjusted net income, adjusted net margin, and adjusted diluted net income per share help identify underlying trends in its business that could otherwise be masked by expenses and one-time gains or charges that it excludes in non-GAAP net income, non-GAAP diluted net income per share, adjusted EBITDA, non-GAAP costs and expenses, adjusted net income, adjusted net margin, and adjusted diluted net income per share, or the effect of the one-time benefits related to the establishment of deferred tax assets or the release of deferred tax asset valuation allowance described above, which are non-operating benefits. In addition, Twitter believes that adjusted free cash flow provides useful information to management and investors about the amount of cash from operations and that it is typically a more conservative measure of cash flows. However, adjusted free cash flow does not necessarily represent funds available for discretionary use and is not necessarily a measure of its ability to fund its cash needs.
These non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similarly titled measures presented by other companies.
Contacts |
|
Investors: |
Press: |
Cherryl Valenzuela |
Giovanna Falbo |
TWITTER, INC. |
||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||
(In thousands) |
||||||
(Unaudited) |
||||||
September 30, 2019 |
December 31, 2018 |
|||||
Assets |
||||||
Current assets: |
||||||
Cash and cash equivalents |
$ |
1,869,444 |
$ |
1,894,444 |
||
Short-term investments |
3,946,940 |
4,314,957 |
||||
Accounts receivable, net |
684,186 |
788,700 |
||||
Prepaid expenses and other current assets |
123,881 |
112,935 |
||||
Total current assets |
6,624,451 |
7,111,036 |
||||
Property and equipment, net |
994,266 |
885,078 |
||||
Operating lease right-of-use assets |
663,423 |
— |
||||
Intangible assets, net |
46,915 |
45,025 |
||||
Goodwill |
1,243,472 |
1,227,269 |
||||
Deferred tax assets, net |
1,896,340 |
808,459 |
||||
Other assets |
132,058 |
85,705 |
||||
Total assets |
$ |
11,600,925 |
$ |
10,162,572 |
||
Liabilities and stockholders' equity |
||||||
Current liabilities: |
||||||
Accounts payable |
$ |
150,785 |
$ |
145,186 |
||
Accrued and other current liabilities |
445,676 |
405,751 |
||||
Convertible notes, short-term |
— |
897,328 |
||||
Operating lease liabilities, short-term |
132,219 |
— |
||||
Finance lease liabilities, short-term |
33,947 |
68,046 |
||||
Total current liabilities |
762,627 |
1,516,311 |
||||
Convertible notes, long-term |
1,794,885 |
1,730,922 |
||||
Operating lease liabilities, long-term |
580,976 |
— |
||||
Finance lease liabilities, long-term |
3,086 |
24,394 |
||||
Deferred and other long-term tax liabilities, net |
20,329 |
17,849 |
||||
Other long-term liabilities |
23,380 |
67,502 |
||||
Total liabilities |
3,185,283 |
3,356,978 |
||||
Stockholders' equity: |
||||||
Common stock |
4 |
4 |
||||
Additional paid-in capital |
8,638,734 |
8,324,974 |
||||
Accumulated other comprehensive loss |
(115,909) |
(65,311) |
||||
Accumulated deficit |
(107,187) |
(1,454,073) |
||||
Total stockholders' equity |
8,415,642 |
6,805,594 |
||||
Total liabilities and stockholders' equity |
$ |
11,600,925 |
$ |
10,162,572 |
||
TWITTER, INC. |
||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
||||||||||||
(In thousands, except per share data) |
||||||||||||
(Unaudited) |
||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||
Revenue |
$ |
823,717 |
$ |
758,111 |
$ |
2,451,988 |
$ |
2,133,523 |
||||
Costs and expenses |
||||||||||||
Cost of revenue |
281,057 |
243,644 |
823,033 |
696,652 |
||||||||
Research and development |
178,553 |
150,764 |
484,041 |
412,684 |
||||||||
Sales and marketing |
226,204 |
193,496 |
672,252 |
559,587 |
||||||||
General and administrative |
93,758 |
78,339 |
259,173 |
218,183 |
||||||||
Total costs and expenses |
779,572 |
666,243 |
2,238,499 |
1,887,106 |
||||||||
Income from operations |
44,145 |
91,868 |
213,489 |
246,417 |
||||||||
Interest expense |
(36,226) |
(38,336) |
(111,803) |
(95,333) |
||||||||
Interest income |
40,348 |
36,067 |
123,776 |
74,208 |
||||||||
Other income (expense), net |
(504) |
(2,341) |
6,583 |
(8,285) |
||||||||
Income before income taxes |
47,763 |
87,258 |
232,045 |
217,007 |
||||||||
Provision (benefit) for income taxes |
11,241 |
(701,921) |
(1,114,841) |
(733,286) |
||||||||
Net income |
$ |
36,522 |
$ |
789,179 |
$ |
1,346,886 |
$ |
950,293 |
||||
Net income per share: |
||||||||||||
Basic |
$ |
0.05 |
$ |
1.04 |
$ |
1.75 |
$ |
1.26 |
||||
Diluted |
$ |
0.05 |
$ |
1.02 |
$ |
1.72 |
$ |
1.23 |
||||
Weighted-average shares used to compute net income per |
||||||||||||
Basic |
772,789 |
756,537 |
768,719 |
752,233 |
||||||||
Diluted |
790,523 |
776,002 |
784,443 |
771,511 |
||||||||
TWITTER, INC. |
||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||||||
(In thousands) |
||||||||||||
(Unaudited) |
||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||
Cash flows from operating activities |
||||||||||||
Net income |
$ |
36,522 |
$ |
789,179 |
$ |
1,346,886 |
$ |
950,293 |
||||
Adjustments to reconcile net income to net cash provided by operating |
||||||||||||
Depreciation and amortization expense |
119,986 |
111,947 |
349,076 |
314,775 |
||||||||
Stock-based compensation expense |
98,623 |
91,606 |
276,729 |
244,341 |
||||||||
Amortization of discount on convertible notes |
30,464 |
30,878 |
93,251 |
74,909 |
||||||||
Deferred income taxes |
5,898 |
(706,081) |
(1,138,293) |
(748,366) |
||||||||
Impairment of investments in privately-held companies |
— |
— |
1,550 |
3,000 |
||||||||
Other adjustments |
4,262 |
(2,779) |
(13,841) |
(5,838) |
||||||||
Changes in assets and liabilities, net of assets acquired and liabilities |
||||||||||||
Accounts receivable |
26,695 |
(11,579) |
93,932 |
35,389 |
||||||||
Prepaid expenses and other assets |
17,019 |
123,536 |
83,646 |
103,234 |
||||||||
Accounts payable |
(7,859) |
(5,762) |
(12,599) |
(22,590) |
||||||||
Accrued and other liabilities |
3,909 |
22,954 |
(54,152) |
58,565 |
||||||||
Net cash provided by operating activities |
335,519 |
443,899 |
1,026,185 |
1,007,712 |
||||||||
Cash flows from investing activities |
||||||||||||
Purchases of property and equipment |
(170,252) |
(120,372) |
(389,073) |
(409,913) |
||||||||
Proceeds from sales of property and equipment |
1,233 |
3,671 |
4,290 |
8,127 |
||||||||
Purchases of marketable securities |
(948,761) |
(2,063,444) |
(3,940,682) |
(4,054,312) |
||||||||
Proceeds from maturities and sales of marketable securities |
1,492,950 |
1,154,449 |
4,325,187 |
2,792,558 |
||||||||
Purchases of investments in privately-held companies |
(50,750) |
— |
(51,163) |
(2,175) |
||||||||
Business combinations, net of cash acquired |
— |
(1,068) |
(20,302) |
(33,572) |
||||||||
Other investing activities |
(9,500) |
— |
2,281 |
— |
||||||||
Net cash provided by (used in) investing activities |
314,920 |
(1,026,764) |
(69,462) |
(1,699,287) |
||||||||
Cash flows from financing activities |
||||||||||||
Proceeds from issuance of convertible notes |
— |
— |
— |
1,150,000 |
||||||||
Purchases of convertible note hedges |
— |
— |
— |
(267,950) |
||||||||
Proceeds from issuance of warrants concurrent with note hedges |
— |
— |
— |
186,760 |
||||||||
Debt issuance costs |
— |
(1,753) |
— |
(13,483) |
||||||||
Repayment of convertible notes |
(935,000) |
— |
(935,000) |
— |
||||||||
Taxes paid related to net share settlement of equity awards |
(3,757) |
(6,820) |
(16,695) |
(16,180) |
||||||||
Payments of finance lease obligations |
(15,694) |
(22,222) |
(53,627) |
(69,504) |
||||||||
Proceeds from exercise of stock options |
244 |
154 |
753 |
3,251 |
||||||||
Proceeds from issuances of common stock under employee stock purchase |
— |
— |
25,209 |
16,337 |
||||||||
Net cash provided by (used in) financing activities |
(954,207) |
(30,641) |
(979,360) |
989,231 |
||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash |
(303,768) |
(613,506) |
(22,637) |
297,656 |
||||||||
Foreign exchange effect on cash, cash equivalents and restricted cash |
(8,792) |
(2,697) |
(1,790) |
(15,211) |
||||||||
Cash, cash equivalents and restricted cash at beginning of period |
2,210,008 |
2,572,505 |
1,921,875 |
1,673,857 |
||||||||
Cash, cash equivalents and restricted cash at end of period |
$ |
1,897,448 |
$ |
1,956,302 |
$ |
1,897,448 |
$ |
1,956,302 |
||||
Supplemental disclosures of non-cash investing and financing activities |
||||||||||||
Common stock issued in connection with acquisitions |
$ |
— |
$ |
— |
$ |
— |
$ |
19,165 |
||||
Equipment purchases under finance leases |
$ |
— |
$ |
— |
$ |
— |
$ |
16,086 |
||||
Changes in accrued property and equipment purchases |
$ |
(50,932) |
$ |
(36,171) |
$ |
26,679 |
$ |
(28,617) |
||||
Reconciliation of cash, cash equivalents and restricted cash as shown in |
||||||||||||
Cash and cash equivalents |
$ |
1,869,444 |
$ |
1,928,929 |
$ |
1,869,444 |
$ |
1,928,929 |
||||
Restricted cash included in prepaid expenses and other current assets |
1,869 |
1,690 |
1,869 |
1,690 |
||||||||
Restricted cash included in other assets |
26,135 |
25,683 |
26,135 |
25,683 |
||||||||
Total cash, cash equivalents and restricted cash |
$ |
1,897,448 |
$ |
1,956,302 |
$ |
1,897,448 |
$ |
1,956,302 |
||||
TWITTER, INC. |
||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES |
||||||||||||
(In thousands, except per share data) |
||||||||||||
(Unaudited) |
||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||
September 30, |
September 30, |
|||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||
Non-GAAP net income and net income per share: |
||||||||||||
Net income |
$ |
36,522 |
$ |
789,179 |
$ |
1,346,886 |
$ |
950,293 |
||||
Exclude: Provision (benefit) for income taxes |
11,241 |
(701,921) |
(1,114,841) |
(733,286) |
||||||||
Income before income taxes |
47,763 |
87,258 |
232,045 |
217,007 |
||||||||
Stock-based compensation expense |
98,623 |
91,606 |
276,729 |
244,341 |
||||||||
Amortization of acquired intangible assets |
3,806 |
4,380 |
12,509 |
14,198 |
||||||||
Non-cash interest expense related to convertible notes |
30,464 |
30,878 |
93,251 |
74,909 |
||||||||
Impairment (gain) on investments in privately-held companies |
— |
— |
(8,611) |
3,000 |
||||||||
Restructuring charges |
— |
(18) |
(217) |
(1,266) |
||||||||
Non-GAAP income before income taxes |
180,656 |
214,104 |
605,706 |
552,189 |
||||||||
Non-GAAP provision (benefit) for income taxes(1) |
43,820 |
51,386 |
(1,058,352) |
132,526 |
||||||||
Non-GAAP net income |
$ |
136,836 |
$ |
162,718 |
$ |
1,664,058 |
$ |
419,663 |
||||
GAAP diluted shares |
790,523 |
776,002 |
784,443 |
771,511 |
||||||||
Non-GAAP diluted net income per share |
$ |
0.17 |
$ |
0.21 |
$ |
2.12 |
$ |
0.54 |
||||
Adjusted EBITDA: |
||||||||||||
Net income |
$ |
36,522 |
$ |
789,179 |
$ |
1,346,886 |
$ |
950,293 |
||||
Stock-based compensation expense |
98,623 |
91,606 |
276,729 |
244,341 |
||||||||
Depreciation and amortization expense |
119,986 |
111,947 |
349,076 |
314,775 |
||||||||
Interest and other expense, net |
(3,618) |
4,610 |
(18,556) |
29,410 |
||||||||
Provision (benefit) for income taxes |
11,241 |
(701,921) |
(1,114,841) |
(733,286) |
||||||||
Restructuring charges |
— |
(18) |
(217) |
(1,266) |
||||||||
Adjusted EBITDA |
$ |
262,754 |
$ |
295,403 |
$ |
839,077 |
$ |
804,267 |
||||
Stock-based compensation expense by function: |
||||||||||||
Cost of revenue |
$ |
5,757 |
$ |
4,247 |
$ |
16,778 |
$ |
12,384 |
||||
Research and development |
53,009 |
53,195 |
149,499 |
140,210 |
||||||||
Sales and marketing |
23,755 |
19,634 |
64,022 |
52,681 |
||||||||
General and administrative |
16,102 |
14,530 |
46,430 |
39,066 |
||||||||
Total stock-based compensation expense |
$ |
98,623 |
$ |
91,606 |
$ |
276,729 |
$ |
244,341 |
||||
Amortization of acquired intangible assets by function: |
||||||||||||
Cost of revenue |
$ |
3,806 |
$ |
3,915 |
$ |
11,889 |
$ |
12,803 |
||||
Sales and marketing |
— |
465 |
620 |
1,395 |
||||||||
Total amortization of acquired intangible assets |
$ |
3,806 |
$ |
4,380 |
$ |
12,509 |
$ |
14,198 |
||||
Restructuring charges by function: |
||||||||||||
Cost of revenue |
$ |
— |
$ |
(1) |
$ |
(13) |
$ |
(78) |
||||
Research and development |
— |
(6) |
(73) |
(425) |
||||||||
Sales and marketing |
— |
(7) |
(87) |
(514) |
||||||||
General and administrative |
— |
(4) |
(44) |
(249) |
||||||||
Total restructuring charges |
$ |
— |
$ |
(18) |
$ |
(217) |
$ |
(1,266) |
||||
Non-GAAP costs and expenses: |
||||||||||||
Total costs and expenses |
$ |
779,572 |
$ |
666,243 |
$ |
2,238,499 |
$ |
1,887,106 |
||||
Less: stock-based compensation expense |
(98,623) |
(91,606) |
(276,729) |
(244,341) |
||||||||
Less: amortization of acquired intangible assets |
(3,806) |
(4,380) |
(12,509) |
(14,198) |
||||||||
Less: restructuring charges |
— |
18 |
217 |
1,266 |
||||||||
Total non-GAAP costs and expenses |
$ |
677,143 |
$ |
570,275 |
$ |
1,949,478 |
$ |
1,629,833 |
||||
Adjusted free cash flow: |
||||||||||||
Net cash provided by operating activities |
$ |
335,519 |
$ |
443,899 |
$ |
1,026,185 |
$ |
1,007,712 |
||||
Less: purchases of property and equipment |
(170,252) |
(120,372) |
(389,073) |
(409,913) |
||||||||
Plus: proceeds from sales of property and equipment |
1,233 |
3,671 |
4,290 |
8,127 |
||||||||
Less: equipment purchases under finance leases |
— |
— |
— |
(16,086) |
||||||||
Adjusted free cash flow |
$ |
166,500 |
$ |
327,198 |
$ |
641,402 |
$ |
589,840 |
||||
Adjusted net income and adjusted diluted net income per share: |
||||||||||||
Net income |
$ |
36,522 |
$ |
789,179 |
$ |
1,346,886 |
$ |
950,293 |
||||
Exclude: benefit from deferred tax assets (2) |
— |
(683,606) |
(1,206,880) |
(725,294) |
||||||||
Adjusted net income |
$ |
36,522 |
$ |
105,573 |
$ |
140,006 |
$ |
224,999 |
||||
GAAP diluted shares |
790,523 |
776,002 |
$ |
784,443 |
771,511 |
|||||||
Adjusted diluted net income per share |
$ |
0.05 |
$ |
0.14 |
$ |
0.18 |
$ |
0.29 |
||||
(1) The non-GAAP benefit from income taxes for the nine months ended September 30, 2019 includes a benefit of $1.21 billion from the establishment of deferred tax assets from intra-entity transfers of |
||||||||||||
(2) The benefit from deferred tax asset in the nine months ended September 30, 2019 is primarily related to the establishment of deferred tax assets from intra-entity transfers of intangible assets. The benefit |
||||||||||||
TWITTER, INC. |
||||||||||||||
RECONCILIATION OF GAAP REVENUE TO NON-GAAP CONSTANT CURRENCY REVENUE |
||||||||||||||
(In millions) |
||||||||||||||
(Unaudited) |
||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||
September 30, |
September 30, |
|||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||
Revenue, advertising revenue, data licensing and other revenue, international |
||||||||||||||
Revenue(1) |
$ |
824 |
$ |
758 |
$ |
2,452 |
$ |
2,134 |
||||||
Foreign exchange effect on 2019 revenue using 2018 rates |
1 |
27 |
||||||||||||
Revenue excluding foreign exchange effect |
$ |
825 |
$ |
2,479 |
||||||||||
Revenue year-over-year change percent |
9 |
% |
15 |
% |
||||||||||
Revenue excluding foreign exchange effect year-over-year change percent |
9 |
% |
16 |
% |
||||||||||
Advertising revenue |
$ |
702 |
$ |
650 |
$ |
2,109 |
$ |
1,826 |
||||||
Foreign exchange effect on 2019 advertising revenue using 2018 rates |
1 |
27 |
||||||||||||
Advertising revenue excluding foreign exchange effect |
$ |
703 |
$ |
2,136 |
||||||||||
Advertising revenue year-over-year change percent |
8 |
% |
15 |
% |
||||||||||
Advertising revenue excluding foreign exchange effect year-over-year change percent |
8 |
% |
17 |
% |
||||||||||
Data licensing and other revenue |
$ |
121 |
$ |
108 |
$ |
343 |
$ |
307 |
||||||
Foreign exchange effect on 2019 data licensing and other revenue using 2018 rates |
— |
— |
||||||||||||
Data licensing and other revenue excluding foreign exchange effect |
$ |
121 |
$ |
343 |
||||||||||
Data licensing and other revenue year-over-year change percent |
12 |
% |
12 |
% |
||||||||||
Data licensing and other revenue excluding foreign exchange effect year-over-year |
12 |
% |
12 |
% |
||||||||||
International revenue |
$ |
358 |
$ |
335 |
$ |
1,099 |
$ |
997 |
||||||
Foreign exchange effect on 2019 international revenue using 2018 rates |
1 |
27 |
||||||||||||
International revenue excluding foreign exchange effect |
$ |
359 |
$ |
1,126 |
||||||||||
International revenue year-over-year change percent |
7 |
% |
10 |
% |
||||||||||
International revenue excluding foreign exchange effect year-over-year change percent |
8 |
% |
13 |
% |
||||||||||
International advertising revenue |
$ |
318 |
$ |
302 |
$ |
983 |
$ |
898 |
||||||
Foreign exchange effect on 2019 international advertising revenue using 2018 rates |
1 |
27 |
||||||||||||
International advertising revenue excluding foreign exchange effect |
$ |
319 |
$ |
1,010 |
||||||||||
International advertising revenue year-over-year change percent |
5 |
% |
9 |
% |
||||||||||
International advertising revenue excluding foreign exchange effect year-over-year |
6 |
% |
12 |
% |
||||||||||
(1) Note the sum of advertising revenue and data licensing and other revenue does not add up to total revenue in the three months ended |
||||||||||||||
(1) Please note that the sum of US and international revenue and the sum of advertising and data licensing and other revenue does not add up to total revenue due to rounding.
SOURCE Twitter, Inc.
Related Links
WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?
Newsrooms &
Influencers
Digital Media
Outlets
Journalists
Opted In
Share this article