SAN FRANCISCO, July 23, 2020 /PRNewswire/ -- Twitter, Inc.
(NYSE: TWTR) today announced financial results for its second
quarter 2020.
"Our product work is paying off, with tremendous growth in
audience and engagement. We grew mDAU to 186 million, a 34% year
over year increase in Q2, the highest quarterly year-over-year
growth rate we've delivered since we began reporting mDAU growth,"
said Jack Dorsey, Twitter's CEO. "I
also want to address the security issue Twitter suffered last week.
We moved quickly to address what happened, and have taken
additional steps to improve resiliency against targeted social
engineering attempts, implemented numerous safeguards to improve
the security of our internal systems, and are working with law
enforcement. We understand our responsibilities and are committed
to earning the trust of all of our stakeholders with our every
action, including how we address this security issue. We will
continue to be transparent in sharing our learnings and
remediations."
"Revenue was $683 million in Q2,
down 19% year over year, reflecting moderate recovery in
advertising demand relative to the last three weeks of March.
Despite the pandemic, brands have found innovative ways to join the
conversation on Twitter to connect with their customers," said
Ned Segal, Twitter's CFO. "We have
completed our ad server rebuild and are making progress
accelerating our performance ads roadmap. With a larger audience
and progress in ads, we are even better positioned to deliver for
advertisers when the live events and product launches that bring
many people and advertisers to Twitter return to our lives."
Second Quarter 2020 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.
The sum of individual metrics may not always equal total amounts
indicated due to rounding.
- Q2 revenue totaled $683 million,
a decrease of 19% year-over-year or 18% on a constant currency
basis.
-
- Advertising revenue totaled $562
million, down 23% year-over-year or 22% on a constant
currency basis. We previously noted that in Q1, widespread economic
disruption and a significant decrease in global advertising spend
as a result of the pandemic led to a 27% decline in advertising
revenue in the last three weeks of March. We saw a gradual,
moderate recovery relative to March levels throughout most of Q2,
with the exception of late May to mid-June, when many brands slowed
or paused spend in reaction to US civil unrest. During the last
three weeks of June, advertising revenue declined 15% year over
year. Demand gradually improved once brands returned after the
protests subsided.
-
- Total ad engagements increased 3% year-over-year.
- Cost per engagement (CPE) decreased 25% year-over-year.
- Data licensing and other revenue totaled $121 million, an increase of 6%
year-over-year.
- US revenue totaled $365 million,
a decrease of 20% year-over-year.
- International revenue totaled $319
million, a decrease of 18% year-over-year or 17% on a
constant currency basis.
- Q2 costs and expenses totaled $807
million, an increase of 5% year over year. This resulted in
an operating loss of $124 million and
-18% operating margin, compared to operating income of $76 million or 9% operating margin in the same
period of the previous year. Expense growth of 5% was lower than
growth in the low teens we expected at the beginning of the quarter
and reflects decisions we have made to reduce spending, continued
cost savings from restricted business operations, and some of the
challenges of growing headcount and investing in our objectives in
the current environment. As we continue to adapt our operations and
improve and increase hiring, we intend to continue investing in our
most important work. We believe total costs and expenses will
increase 10% or more year over year in Q3.
- Stock-based compensation (SBC) expense grew 40% year over year
to $133 million and was approximately
19% of total revenue compared to 12% in the prior quarter. As a
reminder, stock-based compensation expense is closely tied to
headcount, timing of grants, and vesting. Due to these factors, we
expect to recognize more SBC expense in Q2 relative to other
quarters in 2020.
- In Q2 2019, we established a $1.1
billion deferred tax asset and recognized an income tax
benefit. In Q2 2020, we recognized a deferred tax asset valuation
allowance of $1.1 billion and a
non-cash income tax expense based primarily on cumulative taxable
losses driven primarily by COVID-19. This valuation allowance would
be reversed in the event, and to the extent, that it is more likely
than not that there will be sufficient taxable income to realize
the tax benefit. Depending on the extent and severity of COVID-19's
impact, we could have an additional valuation allowance against
deferred tax assets in a future period. As a result of the
valuation allowance, we incurred a net loss of $1.2 billion in Q2, representing a net margin of
-180% and diluted EPS of ($1.56).
Excluding the impact of the income tax expense due to the
establishment of the valuation allowance, Q2 adjusted net loss was
$127 million, representing an
adjusted net margin of -19% and adjusted diluted EPS of
($0.16).
-
- This compares to net income of $1.1
billion, representing a net margin of 133% and diluted EPS
of $1.43 in the same period of the
previous year. Excluding the income tax benefit related to the
establishment of the deferred tax asset mentioned above, adjusted
net income was $37 million, adjusted
net margin was 4% and adjusted diluted EPS was $0.05 in the same period of the previous
year.
- Capital expenditures totaled $162
million, compared to $135
million in the same period last year, driven by investments
we are making in our infrastructure to support audience growth and
product innovation. We intend to increase capex in absolute dollars
sequentially in Q3. The increase will allow us to address our
near-term capacity needs and continue our buildout of a new data
center, contingent on improvements in the IT supply chain.
- Average monetizable daily active users (mDAU) were 186 million
for Q2, compared to 139 million in the same period of the previous
year and compared to 166 million in the previous quarter.
-
- Average US mDAU were 36 million for Q2, compared to 29 million
in the same period of the previous year and compared to 33 million
in the previous quarter.
- Average international mDAU were 150 million for Q2, compared to
110 million in the same period of the previous year and compared to
133 million in the previous quarter.
Appendix
Second Quarter 2020 Webcast and Conference Call
Details
Twitter will host a conference call today,
Thursday, July 23, 2020, at
5am Pacific Time (8am Eastern Time) to discuss financial results
for the second quarter 2020. 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.
Third Quarter Earnings Release Details
Twitter expects
to release financial results for the third quarter of 2020 on
October 29, 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 people, organizations, or other
accounts 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 total accounts. 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. Similarly, our measures of
mDAU growth and engagement may differ from estimates published by
third parties or from similarly titled metrics of our competitors
due to differences in methodology.
The numbers of mDAU 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 engagement across our large number of total accounts
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
second quarter of 2020 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 mDAU, 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 mDAU 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 mDAU may not
accurately reflect the actual number of people or organizations
using our platform.
In addition, geographic location data collected for purposes of
reporting the geographic location of our mDAU is based on the IP
address or phone number associated with the account when an account
is initially registered on Twitter. The IP address or phone number
may not always accurately reflect a person's actual location at the
time they engaged with our platform. For example, someone accessing
Twitter from the location of the proxy server that the person
connects to rather than from the person's actual location.
We regularly review and may adjust our processes for calculating
our internal metrics to improve their accuracy.
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 the impact of the COVID-19 pandemic and
related responses of businesses and governments to the pandemic on
Twitter's operations and operating results, as well as Twitter's
expectations regarding future capital expenditures and other
expenses, including its SBC expense and the timing of such expense;
and Twitter's expectations regarding future tax matters. 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: the COVID-19 pandemic and related impacts
will continue to adversely impact our business, financial condition
and operating results and the achievement of our strategic
objectives as well as the markets in which we operate and worldwide
and regional economies; Twitter's total accounts 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 and fail to drive mDAU
growth; advertisers continue to 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, 2019 and Quarterly
Report on Form 10-Q for the fiscal quarter ended March 31, 2020, 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 fiscal
quarter ended June 30, 2020. 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 (loss),
non-GAAP diluted net income (loss) per share, adjusted EBITDA,
non-GAAP costs and expenses, adjusted net income (loss), adjusted
net margin, adjusted diluted net income (loss) per share, and
adjusted free cash flow. In order to present revenues on a constant
currency basis for the fiscal quarter ended June 30, 2020, 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 (loss) 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 (loss) as
net income (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, 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 (loss) per share is
calculated by dividing non-GAAP net income (loss) by non-GAAP
diluted share count. Non-GAAP diluted share count is GAAP basic
share count plus potential common stock instruments such as stock
options, RSUs, shares to be purchased under employee stock purchase
plan, unvested restricted stock, the conversion feature of
convertible senior notes, and warrants. Twitter defines adjusted
EBITDA as net income (loss) 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
(loss) solely to exclude the income tax benefit from the
establishment of deferred tax assets related to intra-entity
transfers of intangible assets in the three and six months ended
June 30, 2019, and the income tax
provision from the establishment of a valuation allowance against
the deferred tax assets in the three and six months ended
June 30, 2020, and no other
adjustments were made in the calculation of this measure. Adjusted
net margin is calculated by dividing adjusted net income (loss) by
GAAP revenue. Adjusted diluted net income (loss) per share is
calculated by dividing adjusted net income (loss) 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 on a constant currency basis,
non-GAAP income before income taxes, non-GAAP provision (benefit)
for income taxes, non-GAAP net income (loss), non-GAAP diluted net
income (loss) per share, adjusted EBITDA, non-GAAP costs and
expenses, adjusted net income (loss), adjusted net margin, and
adjusted diluted net income (loss) 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
(loss), non-GAAP diluted net income (loss) per share, adjusted
EBITDA, non-GAAP costs and expenses, adjusted net income (loss),
adjusted net margin, and adjusted diluted net income (loss) 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 (loss), non-GAAP diluted net
income (loss) per share, adjusted EBITDA, non-GAAP costs and
expenses, adjusted net income (loss), adjusted net margin, and
adjusted diluted net income (loss) per share, or the effects of the
income tax benefits related to the establishment of deferred tax
assets and the tax provisions from the establishment of a valuation
allowance against deferred tax assets described above, which are
non-operating benefits and expenses. 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:
Cherryl
Valenzuela
ir@twitter.com
Press:
Giovanna
Falbo
press@twitter.com
TWITTER,
INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In
thousands) (Unaudited)
|
|
|
|
June 30,
2020
|
|
December 31,
2019
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
3,112,454
|
|
|
$
|
1,799,082
|
|
Short-term
investments
|
|
4,653,560
|
|
|
4,839,970
|
|
Accounts receivable,
net
|
|
600,777
|
|
|
850,184
|
|
Prepaid expenses and
other current assets
|
|
128,496
|
|
|
130,839
|
|
Total current
assets
|
|
8,495,287
|
|
|
7,620,075
|
|
Property and
equipment, net
|
|
1,142,601
|
|
|
1,031,781
|
|
Operating lease
right-of-use assets
|
|
640,202
|
|
|
697,095
|
|
Intangible assets,
net
|
|
64,347
|
|
|
55,106
|
|
Goodwill
|
|
1,284,325
|
|
|
1,256,699
|
|
Deferred tax assets,
net
|
|
786,290
|
|
|
1,908,086
|
|
Other
assets
|
|
134,535
|
|
|
134,547
|
|
Total
assets
|
|
$
|
12,547,587
|
|
|
$
|
12,703,389
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
162,160
|
|
|
$
|
161,148
|
|
Accrued and other
current liabilities
|
|
383,981
|
|
|
500,893
|
|
Operating lease
liabilities, short-term
|
|
137,718
|
|
|
146,959
|
|
Finance lease
liabilities, short-term
|
|
7,248
|
|
|
23,476
|
|
Total current
liabilities
|
|
691,107
|
|
|
832,476
|
|
Convertible notes,
long-term
|
|
2,734,867
|
|
|
1,816,833
|
|
Senior notes,
long-term
|
|
692,489
|
|
|
691,967
|
|
Operating lease
liabilities, long-term
|
|
560,461
|
|
|
609,245
|
|
Deferred and other
long-term tax liabilities, net
|
|
26,579
|
|
|
24,170
|
|
Other long-term
liabilities
|
|
34,029
|
|
|
24,312
|
|
Total
liabilities
|
|
4,739,532
|
|
|
3,999,003
|
|
Stockholders'
equity:
|
|
|
|
|
Common
stock
|
|
4
|
|
|
4
|
|
Additional paid-in
capital
|
|
9,127,495
|
|
|
8,763,330
|
|
Accumulated other
comprehensive loss
|
|
(93,000)
|
|
|
(70,534)
|
|
Retained earnings
(accumulated deficit)
|
|
(1,226,444)
|
|
|
11,586
|
|
Total stockholders'
equity
|
|
7,808,055
|
|
|
8,704,386
|
|
Total liabilities and
stockholders' equity
|
|
$
|
12,547,587
|
|
|
$
|
12,703,389
|
|
|
|
|
|
|
|
|
|
|
|
TWITTER,
INC. CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (In thousands, except per share
data) (Unaudited)
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenue
|
|
$
|
683,438
|
|
|
$
|
841,381
|
|
|
$
|
1,491,075
|
|
|
$
|
1,628,271
|
|
Costs and
expenses
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
288,039
|
|
|
277,965
|
|
|
572,076
|
|
|
541,976
|
|
Research and
development
|
|
215,806
|
|
|
159,242
|
|
|
416,194
|
|
|
305,488
|
|
Sales and
marketing
|
|
207,286
|
|
|
240,249
|
|
|
428,573
|
|
|
446,048
|
|
General and
administrative
|
|
96,237
|
|
|
88,239
|
|
|
205,605
|
|
|
165,415
|
|
Total costs and
expenses
|
|
807,368
|
|
|
765,695
|
|
|
1,622,448
|
|
|
1,458,927
|
|
Income (loss) from
operations
|
|
(123,930)
|
|
|
75,686
|
|
|
(131,373)
|
|
|
169,344
|
|
Interest
expense
|
|
(39,828)
|
|
|
(38,317)
|
|
|
(73,098)
|
|
|
(75,577)
|
|
Interest
income
|
|
25,013
|
|
|
42,887
|
|
|
57,910
|
|
|
83,428
|
|
Other income
(expense), net
|
|
(361)
|
|
|
7,523
|
|
|
(8,080)
|
|
|
7,087
|
|
Income (loss) before
income taxes
|
|
(139,106)
|
|
|
87,779
|
|
|
(154,641)
|
|
|
184,282
|
|
Provision (benefit)
for income taxes
|
|
1,088,899
|
|
|
(1,031,781)
|
|
|
1,081,760
|
|
|
(1,126,082)
|
|
Net income
(loss)
|
|
$
|
(1,228,005)
|
|
|
$
|
1,119,560
|
|
|
$
|
(1,236,401)
|
|
|
$
|
1,310,364
|
|
Net income (loss) per
share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(1.56)
|
|
|
$
|
1.46
|
|
|
$
|
(1.58)
|
|
|
$
|
1.71
|
|
Diluted
|
|
$
|
(1.56)
|
|
|
$
|
1.43
|
|
|
$
|
(1.58)
|
|
|
$
|
1.68
|
|
Weighted-average
shares used to compute net income (loss)
per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
785,909
|
|
|
768,755
|
|
|
783,303
|
|
|
766,658
|
|
Diluted
|
|
785,909
|
|
|
785,056
|
|
|
783,303
|
|
|
781,378
|
|
TWITTER,
INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (In thousands) (Unaudited)
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Cash flows from
operating activities
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
(1,228,005)
|
|
|
$
|
1,119,560
|
|
|
$
|
(1,236,401)
|
|
|
$
|
1,310,364
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization expense
|
|
123,837
|
|
|
115,616
|
|
|
244,486
|
|
|
229,090
|
|
Stock-based
compensation expense
|
|
132,876
|
|
|
94,615
|
|
|
230,779
|
|
|
178,106
|
|
Amortization of
discount on convertible notes
|
|
26,556
|
|
|
31,910
|
|
|
48,060
|
|
|
62,787
|
|
Bad debt
expense
|
|
3,428
|
|
|
736
|
|
|
17,495
|
|
|
1,363
|
|
Deferred income
taxes
|
|
(19,013)
|
|
|
48,325
|
|
|
(26,037)
|
|
|
62,689
|
|
Deferred tax assets
establishment related to intra-entity transfers of intangible
assets
|
|
—
|
|
|
(1,082,460)
|
|
|
—
|
|
|
(1,206,880)
|
|
Deferred tax assets
valuation allowance establishment
|
|
1,101,374
|
|
|
—
|
|
|
1,101,374
|
|
|
—
|
|
Impairment of
investments in privately-held companies
|
|
500
|
|
|
1,550
|
|
|
8,503
|
|
|
1,550
|
|
Other
adjustments
|
|
3,240
|
|
|
(22,912)
|
|
|
(5,185)
|
|
|
(19,466)
|
|
Changes in assets and
liabilities, net of assets acquired and liabilities assumed
from
acquisitions:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
65,349
|
|
|
(36,396)
|
|
|
234,281
|
|
|
67,237
|
|
Prepaid expenses and
other assets
|
|
9,209
|
|
|
6,737
|
|
|
2,957
|
|
|
(2,547)
|
|
Operating lease
right-of-use assets
|
|
39,368
|
|
|
33,741
|
|
|
78,117
|
|
|
69,174
|
|
Accounts
payable
|
|
(11,754)
|
|
|
8,139
|
|
|
(26,234)
|
|
|
(4,740)
|
|
Accrued and other
liabilities
|
|
(6,257)
|
|
|
49,278
|
|
|
(145,425)
|
|
|
1,281
|
|
Operating lease
liabilities
|
|
(39,692)
|
|
|
(29,466)
|
|
|
(78,987)
|
|
|
(59,342)
|
|
Net cash provided by
operating activities
|
|
201,016
|
|
|
338,973
|
|
|
447,783
|
|
|
690,666
|
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
(164,416)
|
|
|
(135,795)
|
|
|
(287,083)
|
|
|
(218,821)
|
|
Proceeds from sales of
property and equipment
|
|
2,282
|
|
|
1,101
|
|
|
3,905
|
|
|
3,057
|
|
Purchases of
marketable securities
|
|
(1,889,234)
|
|
|
(1,356,779)
|
|
|
(3,122,764)
|
|
|
(2,991,921)
|
|
Proceeds from
maturities of marketable securities
|
|
1,355,500
|
|
|
1,057,638
|
|
|
2,481,134
|
|
|
2,768,938
|
|
Proceeds from sales of
marketable securities
|
|
136,416
|
|
|
28,941
|
|
|
858,669
|
|
|
63,299
|
|
Business combinations,
net of cash acquired
|
|
(19,505)
|
|
|
(20,302)
|
|
|
(34,285)
|
|
|
(20,302)
|
|
Other investing
activities
|
|
—
|
|
|
11,368
|
|
|
(12,389)
|
|
|
11,368
|
|
Net cash used in
investing activities
|
|
(578,957)
|
|
|
(413,828)
|
|
|
(112,813)
|
|
|
(384,382)
|
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
|
Proceeds from issuance
of convertible notes
|
|
—
|
|
|
—
|
|
|
1,000,000
|
|
|
—
|
|
Debt issuance
costs
|
|
—
|
|
|
—
|
|
|
(14,662)
|
|
|
—
|
|
Taxes paid related to
net share settlement of equity awards
|
|
(2,925)
|
|
|
(3,461)
|
|
|
(14,618)
|
|
|
(12,938)
|
|
Payments of finance
lease obligations
|
|
(6,490)
|
|
|
(18,214)
|
|
|
(16,456)
|
|
|
(37,933)
|
|
Proceeds from exercise
of stock options
|
|
118
|
|
|
414
|
|
|
423
|
|
|
509
|
|
Proceeds from
issuances of common stock under employee stock purchase
plan
|
|
34,395
|
|
|
25,209
|
|
|
34,395
|
|
|
25,209
|
|
Net cash provided by
(used in) financing activities
|
|
25,098
|
|
|
3,948
|
|
|
989,082
|
|
|
(25,153)
|
|
Net increase
(decrease) in cash, cash equivalents and restricted cash
|
|
(352,843)
|
|
|
(70,907)
|
|
|
1,324,052
|
|
|
281,131
|
|
Foreign exchange
effect on cash, cash equivalents and restricted cash
|
|
(3,830)
|
|
|
7,148
|
|
|
(15,778)
|
|
|
7,002
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
|
3,492,613
|
|
|
2,273,767
|
|
|
1,827,666
|
|
|
1,921,875
|
|
Cash, cash
equivalents and restricted cash at end of period
|
|
$
|
3,135,940
|
|
|
$
|
2,210,008
|
|
|
$
|
3,135,940
|
|
|
$
|
2,210,008
|
|
Supplemental
disclosures of non-cash investing and financing
activities
|
|
|
|
|
|
|
|
|
Common stock issued in
connection with acquisitions
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,312
|
|
|
$
|
—
|
|
Changes in accrued
property and equipment purchases
|
|
$
|
1,737
|
|
|
$
|
33,891
|
|
|
$
|
40,249
|
|
|
$
|
77,611
|
|
Reconciliation of
cash, cash equivalents and restricted cash as shown in the
consolidated
statements of cash flows
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
3,112,454
|
|
|
$
|
2,183,111
|
|
|
$
|
3,112,454
|
|
|
$
|
2,183,111
|
|
Restricted cash
included in prepaid expenses and other current assets
|
|
2,900
|
|
|
1,379
|
|
|
2,900
|
|
|
1,379
|
|
Restricted cash
included in other assets
|
|
20,586
|
|
|
25,518
|
|
|
20,586
|
|
|
25,518
|
|
Total cash, cash
equivalents and restricted cash
|
|
$
|
3,135,940
|
|
|
$
|
2,210,008
|
|
|
$
|
3,135,940
|
|
|
$
|
2,210,008
|
|
TWITTER,
INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
MEASURES (In thousands, except per share
data) (Unaudited)
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Non-GAAP net
income (loss) and net income (loss) per share:
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
(1,228,005)
|
|
|
$
|
1,119,560
|
|
|
$
|
(1,236,401)
|
|
|
$
|
1,310,364
|
|
Exclude: Provision
(benefit) for income taxes
|
|
1,088,899
|
|
|
(1,031,781)
|
|
|
1,081,760
|
|
|
(1,126,082)
|
|
Income (loss) before
income taxes
|
|
(139,106)
|
|
|
87,779
|
|
|
(154,641)
|
|
|
184,282
|
|
Stock-based
compensation expense
|
|
132,876
|
|
|
94,615
|
|
|
230,779
|
|
|
178,106
|
|
Amortization of
acquired intangible assets
|
|
7,519
|
|
|
3,918
|
|
|
12,560
|
|
|
8,703
|
|
Non-cash interest
expense related to convertible notes
|
|
26,556
|
|
|
31,910
|
|
|
48,060
|
|
|
62,787
|
|
Impairment on
investments in privately-held companies
|
|
500
|
|
|
(8,611)
|
|
|
8,503
|
|
|
(8,611)
|
|
Restructuring
charges
|
|
—
|
|
|
(217)
|
|
|
—
|
|
|
(217)
|
|
Non-GAAP income before
income taxes
|
|
28,345
|
|
|
209,394
|
|
|
145,261
|
|
|
425,050
|
|
Non-GAAP provision
(benefit) for income taxes (1)
|
|
1,118,723
|
|
|
(1,029,343)
|
|
|
1,148,231
|
|
|
(1,102,172)
|
|
Non-GAAP net income
(loss)
|
|
$
|
(1,090,378)
|
|
|
$
|
1,238,737
|
|
|
$
|
(1,002,970)
|
|
|
$
|
1,527,222
|
|
GAAP basic
shares
|
|
785,909
|
|
|
768,755
|
|
|
783,303
|
|
|
766,658
|
|
Dilutive equity awards
(2)
|
|
—
|
|
|
16,301
|
|
|
—
|
|
|
14,720
|
|
Non-GAAP diluted
shares (3)
|
|
785,909
|
|
|
785,056
|
|
|
783,303
|
|
|
781,378
|
|
Non-GAAP diluted net
income (loss) per share
|
|
$
|
(1.39)
|
|
|
$
|
1.58
|
|
|
$
|
(1.28)
|
|
|
$
|
1.95
|
|
Adjusted
EBITDA:
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
(1,228,005)
|
|
|
$
|
1,119,560
|
|
|
$
|
(1,236,401)
|
|
|
$
|
1,310,364
|
|
Stock-based
compensation expense
|
|
132,876
|
|
|
94,615
|
|
|
230,779
|
|
|
178,106
|
|
Depreciation and
amortization expense
|
|
123,837
|
|
|
115,616
|
|
|
244,486
|
|
|
229,090
|
|
Interest and other
expense (income), net
|
|
15,176
|
|
|
(12,093)
|
|
|
23,268
|
|
|
(14,938)
|
|
Provision (benefit)
for income taxes
|
|
1,088,899
|
|
|
(1,031,781)
|
|
|
1,081,760
|
|
|
(1,126,082)
|
|
Restructuring
charges
|
|
—
|
|
|
(217)
|
|
|
—
|
|
|
(217)
|
|
Adjusted
EBITDA
|
|
$
|
132,783
|
|
|
$
|
285,700
|
|
|
$
|
343,892
|
|
|
$
|
576,323
|
|
Stock-based
compensation expense by function:
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
$
|
8,996
|
|
|
$
|
5,973
|
|
|
$
|
14,752
|
|
|
$
|
11,021
|
|
Research and
development
|
|
77,988
|
|
|
50,229
|
|
|
138,575
|
|
|
96,490
|
|
Sales and
marketing
|
|
29,183
|
|
|
22,202
|
|
|
48,022
|
|
|
40,267
|
|
General and
administrative
|
|
16,709
|
|
|
16,211
|
|
|
29,430
|
|
|
30,328
|
|
Total stock-based
compensation expense
|
|
$
|
132,876
|
|
|
$
|
94,615
|
|
|
$
|
230,779
|
|
|
$
|
178,106
|
|
Amortization of
acquired intangible assets by function:
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
$
|
7,519
|
|
|
$
|
3,763
|
|
|
$
|
12,560
|
|
|
$
|
8,083
|
|
Sales and
marketing
|
|
—
|
|
|
155
|
|
|
—
|
|
|
620
|
|
Total amortization of
acquired intangible assets
|
|
$
|
7,519
|
|
|
$
|
3,918
|
|
|
$
|
12,560
|
|
|
$
|
8,703
|
|
Restructuring
charges by function:
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
$
|
—
|
|
|
$
|
(13)
|
|
|
$
|
—
|
|
|
$
|
(13)
|
|
Research and
development
|
|
—
|
|
|
(73)
|
|
|
—
|
|
|
(73)
|
|
Sales and
marketing
|
|
—
|
|
|
(87)
|
|
|
—
|
|
|
(87)
|
|
General and
administrative
|
|
—
|
|
|
(44)
|
|
|
—
|
|
|
(44)
|
|
Total restructuring
charges
|
|
$
|
—
|
|
|
$
|
(217)
|
|
|
$
|
—
|
|
|
$
|
(217)
|
|
Non-GAAP costs and
expenses:
|
|
|
|
|
|
|
|
|
Total costs and
expenses
|
|
$
|
807,368
|
|
|
$
|
765,695
|
|
|
$
|
1,622,448
|
|
|
$
|
1,458,927
|
|
Less: stock-based
compensation expense
|
|
(132,876)
|
|
|
(94,615)
|
|
|
(230,779)
|
|
|
(178,106)
|
|
Less: amortization of
acquired intangible assets
|
|
(7,519)
|
|
|
(3,918)
|
|
|
(12,560)
|
|
|
(8,703)
|
|
Less: restructuring
charges
|
|
—
|
|
|
217
|
|
|
—
|
|
|
217
|
|
Total non-GAAP costs
and expenses
|
|
$
|
666,973
|
|
|
$
|
667,379
|
|
|
$
|
1,379,109
|
|
|
$
|
1,272,335
|
|
TWITTER,
INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
MEASURES (In thousands, except per share
data) (Unaudited) (Continued)
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Adjusted free cash
flow:
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
|
201,016
|
|
|
$
|
338,973
|
|
|
$
|
447,783
|
|
|
$
|
690,666
|
|
Less: purchases of
property and equipment
|
|
(164,416)
|
|
|
(135,795)
|
|
|
(287,083)
|
|
|
(218,821)
|
|
Plus: proceeds from
sales of property and equipment
|
|
2,282
|
|
|
1,101
|
|
|
3,905
|
|
|
3,057
|
|
Adjusted free cash
flow
|
|
$
|
38,882
|
|
|
$
|
204,279
|
|
|
$
|
164,605
|
|
|
$
|
474,902
|
|
Adjusted net
income (loss) and adjusted diluted net income (loss) per
share:
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
(1,228,005)
|
|
|
$
|
1,119,560
|
|
|
$
|
(1,236,401)
|
|
|
$
|
1,310,364
|
|
Exclude: benefit from
deferred tax asset (4)
|
|
—
|
|
|
(1,082,460)
|
|
|
—
|
|
|
(1,206,880)
|
|
Exclude: provision for
deferred tax assets valuation allowance (5)
|
|
1,101,374
|
|
|
—
|
|
|
1,101,374
|
|
|
—
|
|
Adjusted net income
(loss)
|
|
$
|
(126,631)
|
|
|
$
|
37,100
|
|
|
$
|
(135,027)
|
|
|
$
|
103,484
|
|
GAAP diluted
shares
|
|
785,909
|
|
|
785,056
|
|
|
783,303
|
|
|
781,378
|
|
Adjusted diluted net
income (loss) per share
|
|
$
|
(0.16)
|
|
|
$
|
0.05
|
|
|
$
|
(0.17)
|
|
|
$
|
0.13
|
|
|
|
|
|
|
|
|
|
|
(1) The
non-GAAP benefit from income taxes for the three and six months
ended June 30, 2019 includes benefits of $1.08 billion and $1.21
billion, respectively, from the
establishment of deferred tax assets from intra-entity transfers of
intangible assets. The non-GAAP provision for income taxes for the
three and six months ended June 30,
2020 includes a provision of $1.11 billion related to the
establishment of a valuation allowance against deferred tax
assets.
|
(2) 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.
|
(3) GAAP diluted shares are the same
as non-GAAP diluted shares for all periods presented.
|
(4) The benefit from deferred tax
asset in the three and six months ended June 30, 2019 is primarily
related to the establishment of deferred tax assets from
intra-entity
transfers of intangible assets.
|
(5) The provision for deferred tax
assets valuation allowance in the three and six months ended June
30, 2020 is related to the establishment of a valuation allowance
against
deferred tax assets.
|
TWITTER,
INC. RECONCILIATION OF GAAP REVENUE TO NON-GAAP CONSTANT
CURRENCY REVENUE (In
millions) (Unaudited)
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenue,
advertising revenue, data licensing and other revenue,
international revenue
and international advertising revenue excluding foreign exchange
effect (1):
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
683
|
|
|
$
|
841
|
|
|
$
|
1,491
|
|
|
$
|
1,628
|
|
Foreign exchange
effect on 2020 revenue using 2019 rates
|
|
4
|
|
|
|
|
5
|
|
|
|
Revenue excluding
foreign exchange effect
|
|
$
|
687
|
|
|
|
|
$
|
1,496
|
|
|
|
Revenue
year-over-year change percent
|
|
(19)
|
%
|
|
|
|
(8)
|
%
|
|
|
Revenue excluding
foreign exchange effect year-over-year change percent
|
|
(18)
|
%
|
|
|
|
(8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Advertising
revenue
|
|
$
|
562
|
|
|
$
|
727
|
|
|
$
|
1,244
|
|
|
$
|
1,407
|
|
Foreign exchange
effect on 2020 advertising revenue using 2019 rates
|
|
4
|
|
|
|
|
5
|
|
|
|
Advertising revenue
excluding foreign exchange effect
|
|
$
|
566
|
|
|
|
|
$
|
1,249
|
|
|
|
Advertising revenue
year-over-year change percent
|
|
(23)
|
%
|
|
|
|
(12)
|
%
|
|
|
Advertising revenue
excluding foreign exchange effect year-over-year change
percent
|
|
(22)
|
%
|
|
|
|
(11)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Data licensing and
other revenue
|
|
$
|
121
|
|
|
$
|
114
|
|
|
$
|
247
|
|
|
$
|
222
|
|
Foreign exchange
effect on 2020 data licensing and other revenue using 2019
rates
|
|
—
|
|
|
|
|
—
|
|
|
|
Data licensing and
other revenue excluding foreign exchange effect
|
|
$
|
121
|
|
|
|
|
$
|
247
|
|
|
|
Data licensing and
other revenue year-over-year change percent
|
|
6
|
%
|
|
|
|
11
|
%
|
|
|
Data licensing and
other revenue excluding foreign exchange effect year-over-year
change
percent
|
|
6
|
%
|
|
|
|
11
|
%
|
|
|
|
|
|
|
|
|
|
|
|
International
revenue
|
|
$
|
319
|
|
|
$
|
386
|
|
|
$
|
658
|
|
|
$
|
741
|
|
Foreign exchange
effect on 2020 international revenue using 2019 rates
|
|
4
|
|
|
|
|
5
|
|
|
|
International revenue
excluding foreign exchange effect
|
|
$
|
323
|
|
|
|
|
$
|
663
|
|
|
|
International revenue
year-over-year change percent
|
|
(18)
|
%
|
|
|
|
(11)
|
%
|
|
|
International revenue
excluding foreign exchange effect year-over-year change
percent
|
|
(17)
|
%
|
|
|
|
(11)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
International
advertising revenue
|
|
$
|
279
|
|
|
$
|
349
|
|
|
$
|
579
|
|
|
$
|
665
|
|
Foreign exchange
effect on 2020 international advertising revenue using 2019
rates
|
|
4
|
|
|
|
|
5
|
|
|
|
International
advertising revenue excluding foreign exchange effect
|
|
$
|
283
|
|
|
|
|
$
|
584
|
|
|
|
International
advertising revenue year-over-year change percent
|
|
(20)
|
%
|
|
|
|
(13)
|
%
|
|
|
International
advertising revenue excluding foreign exchange effect
year-over-year change
percent
|
|
(19)
|
%
|
|
|
|
(12)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
(1) The sum of individual metrics may
not always equal total amounts indicated due to
rounding.
|
View original
content:http://www.prnewswire.com/news-releases/twitter-announces-second-quarter-2020-results-301098699.html
SOURCE Twitter, Inc.