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
|
ir@twitter.com
|
press@twitter.com
|
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
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
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
share:
|
|
|
|
|
|
|
|
|
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
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
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
activities:
|
|
|
|
|
|
|
|
|
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
assumed from acquisitions:
|
|
|
|
|
|
|
|
|
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
plan
|
|
—
|
|
—
|
|
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
the consolidated statements of cash flows
|
|
|
|
|
|
|
|
|
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
intangible assets.
|
(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
from deferred tax asset in the three and nine months ended
September 30, 2018 is primarily due to net tax benefits primarily
driven by the release of deferred tax assets valuation allowance
for the United
States and Brazil.
|
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 and international advertising revenue excluding foreign
exchange
effect:
|
|
|
|
|
|
|
|
|
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
change percent
|
|
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
change percent
|
|
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
September 30, 2019 and the nine months ended September 30, 2018
above due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
View original
content:http://www.prnewswire.com/news-releases/twitter-announces-third-quarter-2019-results-300944783.html
SOURCE Twitter, Inc.