SAN FRANCISCO, Oct. 27, 2016 /PRNewswire/ -- Twitter, Inc.
(NYSE: TWTR) today announced financial results for its fiscal 2016
third quarter ended September 30,
2016.
The company posted quarterly revenue of $616 million, up 8% year-over-year. Quarterly
GAAP net loss was $103 million, or
($0.15) per diluted share, with
quarterly non-GAAP net income of $92
million, or $0.13 per diluted
share. Average monthly active users (MAUs) were 317 million for the
quarter, up 3% year-over-year and compared to 313 million in the
previous quarter. Average daily active usage (DAU) grew 7%
year-over-year, an acceleration from 5% in Q2 and 3% in Q1.
Advertising revenue totaled $545
million, an increase of 6% year-over-year. Mobile
advertising revenue was 90% of total advertising revenue. Data
licensing and other revenue totaled $71
million, an increase of 26% year-over-year. U.S. revenue
totaled $374 million, an increase of
1% year-over-year. International revenue totaled $242 million, an increase of 21%
year-over-year.
Twitter also announced a restructuring and reduction in
headcount of approximately 9% of its global workforce. The
restructuring, which focuses primarily on reorganizing the
company's sales, partnerships, and marketing efforts, is intended
to create greater focus and efficiency to enable Twitter's goal of
driving toward GAAP profitability in 2017.
"Our strategy is directly driving growth in audience and
engagement, with an acceleration in year-over-year growth for daily
active usage, Tweet impressions, and time spent for the second
consecutive quarter," said Jack
Dorsey, Twitter's CEO. "We see a significant opportunity to
increase growth as we continue to improve the core service. We have
a clear plan, and we're making the necessary changes to ensure
Twitter is positioned for long-term growth. The key drivers of
future revenue growth are trending positive, and we remain
confident in Twitter's future."
"We're getting more disciplined about how we invest in the
business, and we set a company goal of driving toward GAAP
profitability in 2017," said Anthony
Noto, Twitter's CFO. "We intend to fully invest in our
highest priorities and are de-prioritizing certain initiatives and
simplifying how we operate in other areas. Over time, we will look
to invest in additional areas, as justified by expected returns and
business results. In addition, our live strategy is showing great
progress. We've received very positive feedback from partners,
advertisers and people using the service, and we're pleased with
the strong audience and engagement results."
Twitter estimates that it will incur approximately $10 million to $20 million of cash expenditures
as a result of the workforce restructuring, substantially all of
which are severance costs, and $5 million to
$10 million of non-cash expenditures, consisting primarily
of stock-based compensation expense. The company expects to
recognize most of the pre-tax workforce restructuring charges in Q4
2016.
Outlook
Twitter today updated its outlook for the
full year 2016 and provided guidance for the fourth quarter of
2016.
As detailed below, in light of the reorganization of the
company's sales force from three sales channels to two, the company
is not providing specific revenue guidance for the fourth quarter
and full year 2016. The transition of accounts will take place over
the course of the fourth quarter. Because the effects of this
transition could have an impact on the company's revenue
performance, there is a wider range of potential revenue
outcomes.
For full year 2016, Twitter expects:
- Adjusted EBITDA to be in the range of $700 to $715 million;
- Adjusted EBITDA margin on GAAP revenue to be 27.5% to 28%;
and
- Capital expenditures to be no more than $360 million.
Additionally, for the fourth quarter, Twitter
expects:
- Stock-based compensation expense to be in the range of
$150 to $160 million;
- GAAP share count to be in the range of 715 to 720 million
shares;
- Non-GAAP share count to be in the range of 725 to 735 million
shares.
Twitter's complete third quarter 2016 financial results can
be found by accessing the company's Shareholder Letter at:
https://investor.twitterinc.com/releases.cfm
Webcast and Conference Call Details
Twitter will host
a conference call today, Thursday, October
27, 2016 at 5:00 a.m. Pacific
Time (8:00 a.m. Eastern Time)
to discuss financial results. The company will be following the
conversation about the earnings announcement on Twitter. To have
your questions considered during the Q&A, Tweet your questions
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, @twitter and @TwitterIR as means of disclosing material
non-public information and for complying with its disclosure
obligations under Regulation FD.
About Twitter, Inc.
Twitter, Inc. (NYSE: TWTR) is
what's happening in the world right now. From breaking news and
entertainment to sports and politics, from big events to everyday
interests. If it's happening anywhere, it's happening first on
Twitter. Twitter is where the full story unfolds with all the live
commentary and where live events come to life unlike anywhere else.
Twitter is available in more than 40 languages around the world.
The service can be accessed at Twitter.com, on a variety of mobile
devices and via SMS. For more information, visit about.twitter.com
or follow @twitter.
Forward Looking Statements
This 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 release include, but are not limited to,
statements regarding Twitter's future financial and operating
performance, including its GAAP and non-GAAP guidance, strategies,
drivers of revenue growth, goals of reaching profitability in a
specified time period, expectations regarding restructuring
charges, expectations of audience and engagement growth, the
development of, investment in and demand for its products, product
features and services, including video, and product and business
plans, including those relating to Twitter's product roadmap,
audience growth and engagement and product changes. 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. The forward-looking
statements contained in this 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, 2015 and Quarterly
Report on Form 10-Q for the quarter ended June 30, 2016 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, 2016. The
forward-looking statements in this 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.
A Note About Metrics
Twitter defines monthly active
users (MAUs) as Twitter users who logged in or were otherwise
authenticated and accessed Twitter through our website, mobile
website, desktop or mobile applications, SMS or registered
third-party applications or websites in the 30-day period ending on
the date of measurement. Average MAUs for a period represent the
average of the MAUs at the end of each month during the period.
Twitter defines daily active usage or users (DAU) as Twitter
users who logged in or were otherwise authenticated and accessed
Twitter through our website, mobile website or mobile applications
on any given day. Average DAUs for a period represent the average
of the DAUs at the end of such period. In the past, Twitter has
discussed DAUs and the ratio of MAUs to DAUs. In those instances,
for comparability and consistency with MAUs, DAUs also included
users who accessed Twitter through our desktop applications and
third-party properties.
Non-GAAP Financial Measures
To supplement Twitter's
financial information presented in accordance with generally
accepted accounting principles in the
United States, or GAAP, Twitter considers certain financial
measures that are not prepared in accordance with GAAP, including
non-GAAP net income and non-GAAP diluted EPS. Twitter defines
non-GAAP net income as net loss 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, the income tax effects related to
acquisitions, and restructuring charges. Non-GAAP diluted EPS
is calculated by dividing non-GAAP net income by non-GAAP share
count.
Twitter uses the non-GAAP financial measures of non-GAAP net
income and non-GAAP diluted EPS in evaluating its operating results
and for financial and operational decision-making purposes. Twitter
believes that non-GAAP net income and non-GAAP diluted EPS, among
others, help identify underlying trends in its business that could
otherwise be masked by the effect of the expenses that it excludes
in non-GAAP net income and non-GAAP diluted EPS. Twitter also
believes that non-GAAP net income and non-GAAP diluted EPS 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 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 has not reconciled Adjusted EBITDA guidance to GAAP net
loss because it does not provide guidance on GAAP net loss or the
reconciling items between Adjusted EBITDA and GAAP net loss, other
than stock-based compensation expense, as a result of the
uncertainty regarding, and the potential variability of, these
items. The actual amount of net loss and such reconciling
items will have a significant impact on its Adjusted EBITDA and
Adjusted EBITDA margin. Accordingly, a reconciliation of the
non-GAAP financial measure guidance to the corresponding GAAP
measure is not available without unreasonable effort.
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
Press:
Kristin
Binns
kbinns@twitter.com
Investors:
Cherryl
Valenzuela
ir@twitter.com
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,
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Net loss and net
loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(102,871)
|
|
|
$
|
(131,690)
|
|
|
$
|
(289,819)
|
|
|
$
|
(430,795)
|
|
Weighted-average
shares used to compute net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
704,359
|
|
|
|
670,604
|
|
|
|
698,104
|
|
|
|
655,721
|
|
Net loss per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
$
|
(0.15)
|
|
|
$
|
(0.20)
|
|
|
$
|
(0.42)
|
|
|
$
|
(0.66)
|
|
Non-GAAP net
income and net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(102,871)
|
|
|
$
|
(131,690)
|
|
|
$
|
(289,819)
|
|
|
$
|
(430,795)
|
|
Stock-based
compensation expense
|
|
158,527
|
|
|
|
165,921
|
|
|
|
477,138
|
|
|
|
523,869
|
|
Amortization of
acquired intangible assets
|
|
16,572
|
|
|
|
14,481
|
|
|
|
42,118
|
|
|
|
39,241
|
|
Non-cash interest
expense related to convertible notes
|
|
18,650
|
|
|
|
17,495
|
|
|
|
55,590
|
|
|
|
51,139
|
|
Non-cash expense
related to acquisitions
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
926
|
|
Income tax effects
related to acquisitions
|
|
863
|
|
|
|
777
|
|
|
|
2,318
|
|
|
|
(22,370)
|
|
Restructuring
charges
|
|
—
|
|
|
|
—
|
|
|
|
47
|
|
|
|
—
|
|
Non-GAAP net
income
|
$
|
91,741
|
|
|
$
|
66,984
|
|
|
$
|
287,392
|
|
|
$
|
162,010
|
|
GAAP diluted
shares
|
|
704,359
|
|
|
|
670,604
|
|
|
|
698,104
|
|
|
|
655,721
|
|
Dilutive equity awards
(1)
|
|
16,492
|
|
|
|
29,474
|
|
|
|
12,559
|
|
|
|
38,916
|
|
Non-GAAP diluted
shares
|
|
720,851
|
|
|
|
700,078
|
|
|
|
710,663
|
|
|
|
694,637
|
|
Non-GAAP diluted net
income per share
|
$
|
0.13
|
|
|
$
|
0.10
|
|
|
$
|
0.40
|
|
|
$
|
0.23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Gives
effect to potential common stock instruments such as stock options,
RSUs, shares to be issued under ESPP, unvested restricted stock and
warrant. There is no dilutive effect of the notes nor the related
hedge and warrant transactions.
|
|
|
|
|
|
To view the original version on PR
Newswire,
visit:http://www.prnewswire.com/news-releases/twitter-announces-third-quarter-results-300352490.html
SOURCE Twitter, Inc.