SAN FRANCISCO, April 23, 2019 /PRNewswire/ -- Twitter, Inc.
(NYSE: TWTR) today announced financial results for its first
quarter 2019.
"We are taking a more proactive approach to reducing abuse and
its effects on Twitter," said Jack
Dorsey, Twitter's CEO. "We are reducing the burden on
victims and, where possible, taking action before abuse is
reported. For example, we are now removing 2.5x more Tweets that
share personal information and ~38% of abusive Tweets that are
taken down every week are being proactively detected by machine
learning models. We're also continuing our work to make Twitter
more conversational via the launch of our public prototype app
(twttr), with the end goal of making conversation on Twitter feel
faster, more fluid, and more fun."
"We're delivering strong results with ad revenue up 18%
year-over-year, demonstrating Twitter's unique value proposition
for advertisers as the best place to launch something new or
connect with what's happening," said Ned
Segal, Twitter's CFO. "We've never been more confident in
our strategy and execution and see a great opportunity to grow our
audience and deliver even more value for advertisers."
First 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.
- Q1 revenue totaled $787(1)
million, an increase of 18% year-over-year or 20% on a constant
currency basis
-
- Advertising revenue totaled $679
million, an increase of 18% year-over-year or 20% on a
constant currency basis.
-
- Total ad engagements increased 23% year-over-year.
- Cost per engagement (CPE) decreased 4% year-over-year
- Data licensing and other revenue totaled $107 million, an increase of 20%
year-over-year.
- US revenue totaled $432 million,
an increase of 25% year-over-year.
- International revenue totaled $355
million, an increase of 11% year-over-year or 15% on a
constant currency basis.
- Q1 costs and expenses totaled $693
million, an increase of 18% year-over-year. This resulted in
operating income of $94 million and
12% operating margin.
- Q1 net income was $191 million,
representing a net margin of 24% and diluted EPS of $0.25. Excluding the impact of a tax benefit of
$124 million related to the
establishment of a deferred tax asset for corporate structuring for
certain geographies, adjusted net income was $66(2) million, with adjusted net margin of 8%
and adjusted diluted EPS of $0.09. In
the same period last year, we reported net income of $61 million, net margin of 9%, and diluted EPS of
$0.08.
- Average monetizable daily active users (mDAU) were 134(3)
million for Q1, compared to 120 million in the same period of the
previous year and compared to 126 million in the previous
quarter.
-
- Average US mDAU were 28 million for Q1, compared to 26 million
in the same period of the previous year and compared to 27 million
in the previous quarter.
- Average international mDAU were 105 million for Q1, compared to
94 million in the same period of the previous year and compared to
99 million in the previous quarter.
- Average monthly active users (MAU) were 330 million for Q1,
compared to 336 million in the same period of the previous year and
compared to 321 million in the previous quarter.
-
- Average US MAU were 68 million for Q1, compared to 69 million
in the same period of the previous year and compared to 66 million
in the previous quarter.
- Average international MAU were 262 million for Q1, compared to
267 million in the same period of the previous year and compared to
255 million in the previous quarter.
- As a reminder, this is the last quarter we will disclose MAU.
We want to provide something valuable to people on Twitter every
day, and we believe that mDAU, and its related growth, are the best
ways to measure our success.
Outlook
For Q2, we expect:
- Total revenue to be between $770
million and $830 million
- Operating income to be between $35
million and $70 million
For FY 2019, we expect:
- GAAP operating expenses to increase approximately 20% on a
year-over-year basis in 2019 as we continue to invest for growth
and support the top priorities we outlined at the beginning of the
year: health, conversation, revenue product and sales, and
platform
- Stock-based compensation expense to be in the range of
$350 million to $400 million
- Capital expenditures to be between $550
million and $600 million
Note that our outlook for Q2 and the full year 2019 reflects
foreign exchange rates as of April
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
First Quarter 2019 Webcast and Conference Call
Details
Twitter will host a conference call today,
Tuesday, April 23, 2019, at
5am Pacific Time (8am Eastern Time) to discuss financial results
for the first 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.
Second Quarter Earnings Release Details
Twitter will
release financial results for the second quarter of 2019 on
July 26, 2019, 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. Twitter defines monthly active usage or users
(MAU) 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 MAU for a period represent the
average of the MAU at the end of each month during the period.
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; Twitter's
expectations regarding its strategies, product, and business plans,
including its priorities, areas of geographic growth, product
initiatives, and product experiments; strategies for improving the
health of the platform and improving safety, enhancing the
conversation on the platform, and strategies and expectations for
increasing audience growth and advertiser value; and Twitter's
expectations regarding the applicability of certain tax provisions.
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 new products and product
features do not meet expectations; 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,
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 fiscal quarter ended March
31, 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, 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 March 31, 2019, Twitter translated the applicable
measure using the prior year's monthly exchange rates for its
settlement currencies other than the US dollar. We have presented
adjusted net income solely to exclude the benefit related to the
establishment of a deferred tax asset for corporate structuring for
certain geographies, and no other adjustments were made in the
calculation of this measure. 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 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, adjusted net income, adjusted net margin and adjusted 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 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 the effect of the one-time net benefit
related to the establishment of the deferred tax asset described
above, which is a non-operating benefit. 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.
|
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES
|
|
(In thousands,
except per share data)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
|
|
2019
|
|
2018
|
|
Non-GAAP net
income and net income per share:
|
|
|
|
|
|
Net income
|
$
|
190,804
|
$
|
60,997
|
|
Exclude: Provision
(benefit) for income taxes
|
|
(94,301)
|
|
2,885
|
|
Income before income
taxes
|
|
96,503
|
|
63,882
|
|
Stock-based
compensation expense
|
|
83,491
|
|
73,266
|
|
Amortization of
acquired intangible assets
|
|
4,785
|
|
4,942
|
|
Non-cash interest
expense related to convertible notes
|
|
30,877
|
|
20,722
|
|
Restructuring
charges
|
|
—
|
|
(983)
|
|
Non-GAAP income before
income taxes(1)
|
|
215,656
|
|
161,829
|
|
Non-GAAP provision
(benefit) for income taxes(2)
|
|
(72,829)
|
|
38,839
|
|
Non-GAAP net
income(3)
|
$
|
288,485
|
$
|
122,990
|
|
GAAP basic
shares
|
|
764,550
|
|
747,697
|
|
Dilutive equity awards
(4)
|
|
13,139
|
|
18,164
|
|
Non-GAAP diluted
shares (5)
|
|
777,689
|
|
765,861
|
|
Non-GAAP diluted net
income per share
|
$
|
0.37
|
$
|
0.16
|
|
Adjusted
EBITDA(6):
|
|
|
|
|
|
Net income
|
$
|
190,804
|
$
|
60,997
|
|
Stock-based
compensation expense
|
|
83,491
|
|
73,266
|
|
Depreciation and
amortization expense
|
|
113,474
|
|
96,846
|
|
Interest and other
expense, net
|
|
(2,845)
|
|
11,043
|
|
Provision (benefit)
for income taxes
|
|
(94,301)
|
|
2,885
|
|
Restructuring
charges
|
|
—
|
|
(983)
|
|
Adjusted
EBITDA
|
$
|
290,623
|
$
|
244,054
|
|
Non-GAAP costs and
expenses(7):
|
|
|
|
|
|
Total costs and
expenses
|
$
|
693,232
|
$
|
589,946
|
|
Less: stock-based
compensation expense
|
|
(83,491)
|
|
(73,266)
|
|
Less: amortization of
acquired intangible assets
|
|
(4,785)
|
|
(4,942)
|
|
Less: restructuring
charges
|
|
—
|
|
983
|
|
Total non-GAAP costs
and expenses
|
$
|
604,956
|
$
|
512,721
|
|
Adjusted free cash
flow:
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
|
351,693
|
$
|
242,673
|
|
Less: purchases of
property and equipment
|
|
(83,026)
|
|
(93,091)
|
|
Plus: proceeds from
sales of property and equipment
|
|
1,956
|
|
1,763
|
|
Less: equipment
purchases under finance leases
|
|
—
|
|
(16,086)
|
|
Adjusted free cash
flow
|
$
|
270,623
|
$
|
135,259
|
|
Adjusted net
income and adjusted diluted net income per share:
|
|
|
|
|
|
Net income
|
$
|
190,804
|
$
|
60,997
|
|
Exclude: benefit from
deferred tax asset (8)
|
|
(124,420)
|
|
—
|
|
Adjusted net
income
|
$
|
66,384
|
$
|
60,997
|
|
GAAP diluted
shares
|
|
777,689
|
|
765,861
|
|
Adjusted diluted net
income per share
|
$
|
0.09
|
$
|
0.08
|
|
|
|
|
|
|
|
(1) 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 of investments in
privately held companies, restructuring charges, and one-time
nonrecurring gain, if any.
|
|
(2) 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. The non-GAAP benefit for income taxes for the
three months ended March 31, 2019 is primarily due to the
establishment of a deferred tax asset for corporate structuring for
certain geographies.
|
|
(3)
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 of 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.
|
|
(4) Gives
effect to potential common stock instruments such as stock options,
RSUs, shares to be issued under ESPP, unvested restricted stocks
and warrants. There is no dilutive effect of the
notes or the related hedge and warrant transactions.
|
|
(5) GAAP dilutive shares are the same
as non-GAAP dilutive shares for the three months ended March 31,
2019 and 2018.
|
|
(6)
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, and restructuring charges and one-time
nonrecurring gain, if any.
|
|
(7)
Twitter defines non-GAAP costs and expenses as total costs and
expenses adjusted to exclude stock-based compensation expense,
amortization of acquired intangible assets, and
restructuring charges and one-time nonrecurring gain, if
any.
|
|
(8) The
benefit from deferred tax asset in the three months ended March 31,
2019 is related to the establishment of a deferred tax asset for
corporate structuring for certain geographies.
|
|
TWITTER,
INC.
|
|
RECONCILIATION OF
GAAP REVENUE TO NON-GAAP CONSTANT CURRENCY REVENUE
|
|
(In
millions)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
|
|
|
2019
|
|
|
2018
|
|
Revenue,
advertising revenue, data licensing and other revenue,
international revenue and
international advertising revenue excluding foreign exchange
effect:
|
|
|
|
|
|
|
|
|
Revenue(1)
|
|
$
|
787
|
|
|
$
|
665
|
|
Foreign exchange
effect on 2019 revenue using 2018 rates
|
|
|
11
|
|
|
|
|
|
Revenue excluding
foreign exchange effect
|
|
$
|
798
|
|
|
|
|
|
Revenue
year-over-year change percent
|
|
|
18%
|
|
|
|
|
|
Revenue excluding
foreign exchange effect year-over-year change percent
|
|
|
20%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advertising
revenue
|
|
$
|
679
|
|
|
$
|
575
|
|
Foreign exchange
effect on 2019 advertising revenue using 2018 rates
|
|
|
11
|
|
|
|
|
|
Advertising revenue
excluding foreign exchange effect
|
|
$
|
690
|
|
|
|
|
|
Advertising revenue
year-over-year change percent
|
|
|
18%
|
|
|
|
|
|
Advertising revenue
excluding foreign exchange effect year-over-year change
percent
|
|
|
20%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Data licensing and
other revenue
|
|
$
|
107
|
|
|
$
|
90
|
|
Foreign exchange
effect on 2019 data licensing and other revenue using 2018
rates
|
|
|
—
|
|
|
|
|
|
Data licensing and
other revenue excluding foreign exchange effect
|
|
$
|
107
|
|
|
|
|
|
Data licensing and
other revenue year-over-year change percent
|
|
|
20%
|
|
|
|
|
|
Data licensing and
other revenue excluding foreign exchange effect year-over-year
change
percent
|
|
|
20%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
revenue
|
|
$
|
355
|
|
|
$
|
318
|
|
Foreign exchange
effect on 2019 international revenue using 2018 rates
|
|
|
11
|
|
|
|
|
|
International revenue
excluding foreign exchange effect
|
|
$
|
366
|
|
|
|
|
|
International revenue
year-over-year change percent
|
|
|
11%
|
|
|
|
|
|
International revenue
excluding foreign exchange effect year-over-year change
percent
|
|
|
15%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
advertising revenue
|
|
$
|
317
|
|
|
$
|
287
|
|
Foreign exchange
effect on 2019 international advertising revenue using 2018
rates
|
|
|
11
|
|
|
|
|
|
International
advertising revenue excluding foreign exchange effect
|
|
$
|
328
|
|
|
|
|
|
International
advertising revenue year-over-year change percent
|
|
|
10%
|
|
|
|
|
|
International
advertising revenue excluding foreign exchange effect
year-over-year change
percent
|
|
|
14%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 March 31,
2019 above due to rounding.
|
|
|
|
(1) Please note that the sum of Data Licensing and Other
Revenue and Advertising Revenue does not add up to Total Revenue
due to rounding.
(2) Please note that net income less our Q1 tax benefit does
not equal adjusted net income due to rounding.
(3) Please note that the sum of US mDAU and International mDAU
does not add up to total mDAU in Q1'19 due to rounding.
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SOURCE Twitter, Inc.