SAN FRANCISCO, Feb. 10, 2022 /PRNewswire/ -- Twitter, Inc.
(NYSE: TWTR) today announced financial results for its fourth
quarter and fiscal year 2021.
"Our strong 2021 performance positions us to improve execution
and deliver on our 2023 goals," said Parag
Agrawal, Twitter's CEO. "We are more focused and better
organized to deliver improved personalization and selection for our
audience, partners, and advertisers."
"Twitter had a solid fourth quarter to finish 2021, with over
$5 billion in annual revenue, up 37%
for the year," said Ned Segal,
Twitter's CFO. "There are no changes to our goals of 315 million
average mDAU in Q4 2023 and $7.5
billion or more revenue in 2023. Our increased focus on
performance ads and the SMB opportunity after the sale of MoPub
positions us even better for 2022 and beyond."
Fiscal Year 2021 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.
- 2021 revenue was $5.08 billion,
an increase of 37% year over year.
- 2021 operating loss of $493
million, or an operating margin of -10%, includes a one-time
litigation-related net charge of $766
million1, as well as ongoing
investments.
-
- 2021 adjusted operating income, which excludes the one-time
litigation-related net charge, was $273
million reflecting an adjusted operating margin of 5%.
Operating income was $27 million in
2020, which includes a $150 million
non-recurring expense related to an ongoing FTC matter in Q2 of
2020, representing an operating margin of 1%.
- 2021 net loss was $221 million,
representing a net margin of -4% and diluted EPS of ($0.28).
-
- 2020 net loss of $1.14 billion
includes a deferred tax asset valuation allowance of $1.10 billion and corresponding non-cash income
tax expense based primarily on cumulative taxable losses driven
primarily by COVID-19, representing a net margin of -31% and
diluted EPS of ($1.44).
1 Includes
a charge recorded in the third quarter of 2021 of $809.5 million to
settle a shareholder class action lawsuit partially offset by the
recognition of an insurance recovery of $5.8 million. In addition,
during the third quarter we recorded a benefit for insurance
proceeds of $38.0 million related to the settlement of separate
shareholder derivative lawsuits.
|
Fourth Quarter 2021 Operational and Financial
Highlights
- Q4 revenue totaled $1.57 billion,
an increase of 22% year over year or 23% on a constant currency
basis.
-
- Advertising revenue totaled $1.41
billion, up 22% year over year or 24% on a constant currency
basis.
-
- Total ad engagements decreased 12% year over year.
- Cost per engagement (CPE) increased 39% year over year.
- Data licensing and other revenue totaled $154 million, an increase of 15% year over
year.
- US revenue totaled $885 million,
an increase of 21% year over year.
- International revenue totaled $683
million, an increase of 23% year over year or 26% on a
constant currency basis.
- Q4 costs and expenses totaled $1.40
billion, an increase of 35% year over year. This resulted in
operating income of $167 million and
11% operating margin, compared to operating income of $252 million and 20% operating margin in the same
period of the previous year.
- Stock-based compensation (SBC) expense grew 38% year over year
to $177 million and was approximately
11% of total revenue.
- Q4 net income was $182 million,
representing a net margin of 12% and diluted EPS of $0.21. This compares to net income of
$222 million, a net margin of 17%,
and diluted EPS of $0.27 in the same
period of the previous year.
- Net cash used in operating activities in the quarter was
$528 million due primarily to the
cash payment of a litigation settlement announced in Q3,
compared to $330 million of net cash
provided by operating activities in the same period last year.
Capital expenditures totaled $138
million, compared to $292
million in the same period last year, reflecting our latest
data center buildouts, as well as delays in equipment delivery in
Q4'21 due to supply chain disruptions.
- Average mDAU was 217 million for Q4, compared to 192 million in
the same period of the previous year and compared to 211 million in
the previous quarter.
-
- Average US mDAU was 38 million for Q4, compared to 37 million
in the same period of the previous year and compared to 37 million
in the previous quarter.
- Average international mDAU was 179 million for Q4, compared to
155 million in the same period of the previous year and compared to
174 million in the previous
quarter.
Our Board of Directors has authorized a new $4 billion share repurchase program. The program
is effective immediately and replaces the previously approved
$2 billion program from 2020, of
which approximately $819 million
remained. As part of the new program, we intend to enter into a
$2 billion accelerated share
repurchase (ASR) and repurchase the remaining $2 billion over time. We will continuously
evaluate efficient alternatives to using cash on hand to fund the
program, including accessing the capital markets, subject to market
conditions.
Outlook
For Q1'22, we expect:
- Total revenue to be between $1.17
billion and $1.27
billion.
- GAAP operating loss to be between $225
million and $175 million.
For FY22, we expect:
- Stock-based compensation expense to be between $900 million and $925
million.
- Capital expenditures to be between $900
million and $950
million.
Note that our outlook for Q1 and the full year 2022 reflects
foreign exchange rates as of January
2022.
For more information regarding the non-GAAP financial measures
discussed in this press release, please see "Non-GAAP Financial
Measures" and the reconciliations of these non-GAAP financial
measures to the most directly comparable financial measures
calculated in accordance with GAAP below.
Appendix
Fourth Quarter and Full Year 2021 Webcast and Conference Call
Details
Twitter will host a conference call today, Thursday, February 10, 2022, at 5am Pacific Time (8am
Eastern Time) to discuss financial results for the fourth
quarter and full fiscal year of 2021. 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
@paraga, @nedsegal, @Twitter, and @TwitterIR as means of disclosing
material nonpublic information and for complying with its
disclosure obligations under Regulation FD.
First Quarter Earnings Release Details
Twitter expects to release financial results for the first quarter
on April 28, 2022, before the market
opens. Twitter will host a conference call on the same day to
discuss these financial results at 5am
Pacific Time (8am Eastern
Time).
About Twitter, Inc. (NYSE: TWTR)
Twitter (NYSE: TWTR) is what's happening and what people are
talking about right now. To learn more, visit about.twitter.com and
follow @Twitter. Let's talk.
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, Twitter applications that are able to show
ads, or paid Twitter products, including subscriptions. We
updated our mDAU definition in the fourth quarter of 2021 to
also include "paid Twitter products, including subscriptions",
so this key metric continues to accurately reflect our audience as
our products evolve. This change had no material impact on the
number of mDAU reported in the fourth quarter of 2021, and is
unlikely to do so in the near future. This change is effective for
the fourth quarter of 2021 and for future periods, and it did not
affect prior periods. 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
fourth quarter of 2021 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," "positions," "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 2023 revenue and mDAU goals, as
well as the factors, assumptions and variables underlying Twitter's
outlook, guidance and goals; Twitter's focus on performance ads and
the SMB opportunity;Twitter's expectations regarding future capital
expenditures and other expenses, including its SBC expense; and
Twitter's expectations regarding share repurchases, including the
timing and amount of repurchases, its intentions regarding an
accelerated share repurchase, and its strategies to fund the
repurchase program. 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, 2020 and Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 2021,
June 30, 2021 and September 30, 2021, each filed with the
Securities and Exchange Commission. Additional information will
also be set forth in Twitter's Annual Report on Form 10-K for the
fiscal year ended December 31, 2021.
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 operating
income, adjusted operating margin, adjusted EBITDA, non-GAAP costs
and expenses, and adjusted free cash flow. In order to present
revenues on a constant currency basis for the fiscal year and
quarter ended December 31, 2021,
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 income from
operations solely to exclude the one time net charge related to
litigation in 2021, and no other adjustments were made in the
calculation of this measure. Adjusted operating margin is
calculated by dividing adjusted operating income by GAAP revenue.
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 income from operations, and adjusted operating
margin 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 income from operations, and
adjusted operating margin help identify underlying trends in its
business that could otherwise be masked by expenses and one-time
gains or charges.
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:
ir@twitter.com
Press:
press@twitter.com
TWITTER,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In
thousands)
|
(Unaudited)
|
|
|
|
December 31,
2021
|
|
December 31,
2020
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
2,186,549
|
|
$
1,988,429
|
Short-term
investments
|
|
4,207,133
|
|
5,483,873
|
Accounts receivable,
net
|
|
1,217,404
|
|
1,041,743
|
Prepaid expenses and
other current assets
|
|
266,484
|
|
123,063
|
Assets held for
sale
|
|
40,800
|
|
—
|
Total current
assets
|
|
7,918,370
|
|
8,637,108
|
Property and
equipment, net
|
|
2,082,160
|
|
1,493,794
|
Operating lease
right-of-use assets
|
|
1,195,124
|
|
930,139
|
Intangible assets,
net
|
|
69,324
|
|
58,338
|
Goodwill
|
|
1,301,520
|
|
1,312,346
|
Deferred tax assets,
net
|
|
1,148,573
|
|
796,326
|
Other
assets
|
|
344,445
|
|
151,039
|
Total
assets
|
|
$
14,059,516
|
|
$
13,379,090
|
Liabilities and
stockholders' equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
203,171
|
|
$
194,281
|
Accrued and other
current liabilities
|
|
918,350
|
|
663,532
|
Convertible notes,
short-term
|
|
—
|
|
917,866
|
Operating lease
liabilities, short-term
|
|
222,346
|
|
177,147
|
Total current
liabilities
|
|
1,343,867
|
|
1,952,826
|
Convertible notes,
long-term
|
|
3,559,023
|
|
1,875,878
|
Senior notes,
long-term
|
|
693,996
|
|
692,994
|
Operating lease
liabilities, long-term
|
|
1,071,209
|
|
819,748
|
Deferred and other
long-term tax liabilities, net
|
|
40,691
|
|
31,463
|
Other long-term
liabilities
|
|
43,531
|
|
36,099
|
Total
liabilities
|
|
6,752,317
|
|
5,409,008
|
Stockholders'
equity:
|
|
|
|
|
Common
stock
|
|
4
|
|
4
|
Additional paid-in
capital
|
|
8,432,112
|
|
9,167,138
|
Treasury
stock
|
|
(5,295)
|
|
(5,297)
|
Accumulated other
comprehensive loss
|
|
(117,320)
|
|
(66,094)
|
Accumulated
deficit
|
|
(1,002,302)
|
|
(1,125,669)
|
Total stockholders'
equity
|
|
7,307,199
|
|
7,970,082
|
Total liabilities and
stockholders' equity
|
|
$
14,059,516
|
|
$
13,379,090
|
|
|
|
|
|
TWITTER,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In thousands,
except per share data)
|
(Unaudited)
|
|
|
|
Three Months
Ended
December
31,
|
|
Year
Ended
December
31,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Revenue
|
|
$
1,567,220
|
|
$
1,289,041
|
|
$
5,077,482
|
|
$
3,716,349
|
Costs and
expenses
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
515,091
|
|
432,924
|
|
1,797,510
|
|
1,366,388
|
Research and
development
|
|
371,884
|
|
247,940
|
|
1,246,704
|
|
873,011
|
Sales and
marketing
|
|
338,398
|
|
244,002
|
|
1,175,970
|
|
887,860
|
General and
administrative (1)
|
|
174,472
|
|
112,251
|
|
584,336
|
|
562,432
|
Litigation settlement,
net (2)
|
|
—
|
|
—
|
|
765,701
|
|
—
|
Total costs and
expenses
|
|
1,399,845
|
|
1,037,117
|
|
5,570,221
|
|
3,689,691
|
Income (loss) from
operations
|
|
167,375
|
|
251,924
|
|
(492,739)
|
|
26,658
|
Interest
expense
|
|
(10,824)
|
|
(40,166)
|
|
(51,186)
|
|
(152,878)
|
Interest
income
|
|
7,355
|
|
13,101
|
|
35,683
|
|
88,178
|
Other income
(expense), net
|
|
20,759
|
|
(840)
|
|
97,129
|
|
(12,897)
|
Income (loss) before
income taxes
|
|
184,665
|
|
224,019
|
|
(411,113)
|
|
(50,939)
|
Provision (benefit)
for income taxes
|
|
2,971
|
|
1,903
|
|
(189,704)
|
|
1,084,687
|
Net income
(loss)
|
|
$
181,694
|
|
$
222,116
|
|
$
(221,409)
|
|
$
(1,135,626)
|
Net income (loss) per
share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.23
|
|
$
0.28
|
|
$
(0.28)
|
|
$
(1.44)
|
Diluted
|
|
$
0.21
|
|
$
0.27
|
|
$
(0.28)
|
|
$
(1.44)
|
Numerator used to
compute net income (loss) per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
181,694
|
|
$
222,116
|
|
$
(221,409)
|
|
$
(1,135,626)
|
Diluted
|
|
$
184,589
|
|
$
222,116
|
|
$
(221,409)
|
|
$
(1,135,626)
|
Weighted-average
shares used to compute net income (loss) per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
799,370
|
|
793,789
|
|
797,573
|
|
787,861
|
Diluted
|
|
865,030
|
|
816,368
|
|
797,573
|
|
787,861
|
|
|
|
|
|
|
|
|
|
(1) In the
second quarter of 2020, we recorded $150 million in general and
administrative expenses in the consolidated statements of
operations related to a draft complaint from the Federal Trade
Commission.
|
(2) In the
third quarter of 2021, we entered into an agreement to settle a
shareholder class action lawsuit and recorded a charge of $809.5
million partially offset by the recognition of an insurance
recovery of $5.8 million. In addition, during the third quarter we
recorded a benefit for insurance proceeds of $38.0 million related
to the settlement of separate shareholder derivative
lawsuits.
|
TWITTER,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In
thousands)
|
(Unaudited)
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Cash flows from
operating activities
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
181,694
|
|
$
222,116
|
|
$
(221,409)
|
|
$
(1,135,626)
|
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization expense
|
|
145,536
|
|
128,708
|
|
544,848
|
|
495,177
|
Stock-based
compensation expense
|
|
176,531
|
|
128,184
|
|
629,901
|
|
474,932
|
Amortization of
discount on convertible notes
|
|
—
|
|
27,000
|
|
—
|
|
101,733
|
Bad debt
expense
|
|
(874)
|
|
1,914
|
|
1,560
|
|
18,775
|
Deferred income
taxes
|
|
(5,985)
|
|
(4,596)
|
|
(228,774)
|
|
(36,978)
|
Deferred tax assets
valuation allowance establishment
|
|
—
|
|
—
|
|
—
|
|
1,101,374
|
Impairment (gain) on
investments in privately-held companies
|
|
(24,651)
|
|
—
|
|
(101,445)
|
|
8,842
|
Other
adjustments
|
|
1,454
|
|
(3,008)
|
|
2,975
|
|
(10,764)
|
Changes in assets and
liabilities, net of assets acquired and liabilities assumed from
acquisitions:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
(209,776)
|
|
(285,851)
|
|
(189,946)
|
|
(188,039)
|
Prepaid expenses and
other assets
|
|
(43,107)
|
|
31,163
|
|
(121,501)
|
|
6,398
|
Operating lease
right-of-use assets
|
|
59,396
|
|
46,288
|
|
219,287
|
|
168,000
|
Accounts
payable
|
|
168
|
|
23,954
|
|
20,869
|
|
18,232
|
Accrued and other
liabilities
|
|
(768,616)
|
|
46,848
|
|
260,475
|
|
123,345
|
Operating lease
liabilities
|
|
(40,212)
|
|
(32,420)
|
|
(184,151)
|
|
(152,531)
|
Net cash provided by
(used in) operating activities
|
|
(528,442)
|
|
330,300
|
|
632,689
|
|
992,870
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
(139,943)
|
|
(295,525)
|
|
(1,011,546)
|
|
(873,354)
|
Proceeds from sales of
property and equipment
|
|
1,549
|
|
3,355
|
|
8,462
|
|
9,170
|
Purchases of
marketable securities
|
|
(951,645)
|
|
(1,168,412)
|
|
(3,736,659)
|
|
(6,272,395)
|
Proceeds from
maturities of marketable securities
|
|
623,514
|
|
987,343
|
|
3,811,768
|
|
4,554,238
|
Proceeds from sales of
marketable securities
|
|
31,012
|
|
167,367
|
|
1,172,626
|
|
1,092,754
|
Purchases of
investments in privately-held companies
|
|
(6,572)
|
|
(8,073)
|
|
(39,761)
|
|
(11,912)
|
Investments in Finance
Justice Fund
|
|
(17,500)
|
|
—
|
|
(69,500)
|
|
—
|
Business combinations,
net of cash acquired
|
|
(9,765)
|
|
(13,731)
|
|
(32,702)
|
|
(48,016)
|
Other investing
activities
|
|
(41,680)
|
|
—
|
|
(50,065)
|
|
(11,050)
|
Net cash provided by
(used in) investing activities
|
|
(511,030)
|
|
(327,676)
|
|
52,623
|
|
(1,560,565)
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
|
Proceeds from issuance
of convertible notes
|
|
—
|
|
—
|
|
1,437,500
|
|
1,000,000
|
Purchases of
convertible note hedges
|
|
—
|
|
—
|
|
(213,469)
|
|
—
|
Proceeds from issuance
of warrants concurrent with note hedges
|
|
—
|
|
—
|
|
161,144
|
|
—
|
Debt issuance
costs
|
|
—
|
|
—
|
|
(16,769)
|
|
(14,662)
|
Repayment of
convertible notes
|
|
—
|
|
—
|
|
(954,000)
|
|
—
|
Repurchases of common
stock
|
|
(265,709)
|
|
(245,292)
|
|
(930,530)
|
|
(245,292)
|
Taxes paid related to
net share settlement of equity awards
|
|
(5,270)
|
|
(4,243)
|
|
(26,982)
|
|
(22,587)
|
Payments of finance
lease obligations
|
|
—
|
|
(2,489)
|
|
(565)
|
|
(23,062)
|
Proceeds from exercise
of stock options
|
|
19
|
|
4,988
|
|
2,056
|
|
5,442
|
Proceeds from
issuances of common stock under employee stock purchase
plan
|
|
29,261
|
|
21,076
|
|
68,792
|
|
55,471
|
Net cash provided by
(used in) financing activities
|
|
(241,699)
|
|
(225,960)
|
|
(472,823)
|
|
755,310
|
Net increase
(decrease) in cash, cash equivalents and restricted cash
|
|
(1,281,171)
|
|
(223,336)
|
|
212,489
|
|
187,615
|
Foreign exchange
effect on cash, cash equivalents and restricted cash
|
|
(4,689)
|
|
10,849
|
|
(13,080)
|
|
(4,005)
|
Cash, cash
equivalents and restricted cash at beginning of period
|
|
3,496,545
|
|
2,223,763
|
|
2,011,276
|
|
1,827,666
|
Cash, cash
equivalents and restricted cash at end of period
|
|
$
2,210,685
|
|
$
2,011,276
|
|
$
2,210,685
|
|
$
2,011,276
|
Supplemental
disclosures of non-cash investing and financing
activities
|
|
|
|
|
|
|
|
|
Common stock issued in
connection with acquisitions
|
|
$
12,640
|
|
$
6,999
|
|
$
12,640
|
|
$
8,311
|
Changes in accrued
property and equipment purchases
|
|
$
(5,856)
|
|
$
(78,767)
|
|
$
(12,149)
|
|
$
24,882
|
Reconciliation of
cash, cash equivalents and restricted cash as shown in the
consolidated statements of cash flows
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
2,186,549
|
|
$
1,988,429
|
|
$
2,186,549
|
|
$
1,988,429
|
Restricted cash
included in prepaid expenses and other current assets
|
|
8,140
|
|
2,287
|
|
8,140
|
|
2,287
|
Restricted cash
included in other assets
|
|
15,996
|
|
20,560
|
|
15,996
|
|
20,560
|
Total cash, cash
equivalents and restricted cash
|
|
$
2,210,685
|
|
$
2,011,276
|
|
$
2,210,685
|
|
$
2,011,276
|
TWITTER,
INC.
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES
|
(In thousands,
except per share data)
|
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Non-GAAP net
income (loss):
|
|
|
|
|
|
|
|
|
Net income (loss)
(1) (2)
|
|
$
181,694
|
|
$
222,116
|
|
$
(221,409)
|
|
$
(1,135,626)
|
Exclude: Provision
(benefit) for income taxes
|
|
2,971
|
|
1,903
|
|
(189,704)
|
|
1,084,687
|
Income (loss) before
income taxes
|
|
184,665
|
|
224,019
|
|
(411,113)
|
|
(50,939)
|
Exclude:
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense
|
|
176,531
|
|
128,184
|
|
629,901
|
|
474,932
|
Amortization of
acquired intangible assets
|
|
10,577
|
|
5,585
|
|
41,224
|
|
23,569
|
Non-cash
interest expense related to convertible notes
(3)
|
|
—
|
|
27,000
|
|
—
|
|
101,733
|
Impairment
(gain) on investments in privately-held companies
|
|
(24,651)
|
|
—
|
|
(101,445)
|
|
8,842
|
Non-GAAP income before
income taxes
|
|
347,122
|
|
384,788
|
|
158,567
|
|
558,137
|
Non-GAAP provision
(benefit) for income taxes (4)
|
|
63,132
|
|
71,762
|
|
(6,735)
|
|
1,246,706
|
Non-GAAP net income
(loss)
|
|
$
283,990
|
|
$
313,026
|
|
$
165,302
|
|
$
(688,569)
|
Non-GAAP diluted
net income (loss) per share:
|
|
|
|
|
|
|
|
|
Non-GAAP net income
(loss)
|
|
$
283,990
|
|
$
313,026
|
|
$
165,302
|
|
$
(688,569)
|
Plus: interest expense
on convertible notes, net of tax (5)
|
|
2,895
|
|
—
|
|
3,787
|
|
—
|
Numerator used to
compute non-GAAP diluted net income (loss) per share
|
|
$
286,885
|
|
$
313,026
|
|
$
169,089
|
|
$
(688,569)
|
GAAP diluted shares
(6)
|
|
865,030
|
|
816,368
|
|
797,573
|
|
787,861
|
Non-GAAP dilutive
securities (7)
|
|
—
|
|
—
|
|
32,398
|
|
—
|
Non-GAAP diluted
shares
|
|
865,030
|
|
816,368
|
|
829,971
|
|
787,861
|
Non-GAAP diluted net
income (loss) per share
|
|
$
0.33
|
|
$
0.38
|
|
$
0.20
|
|
$
(0.87)
|
Adjusted
EBITDA:
|
|
|
|
|
|
|
|
|
Net income (loss)
(1) (2)
|
|
$
181,694
|
|
$
222,116
|
|
$
(221,409)
|
|
$
(1,135,626)
|
Exclude:
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense
|
|
176,531
|
|
128,184
|
|
629,901
|
|
474,932
|
Depreciation and
amortization expense
|
|
145,536
|
|
128,708
|
|
544,848
|
|
495,177
|
Interest and other
expense (income), net
|
|
(17,290)
|
|
27,905
|
|
(81,626)
|
|
77,597
|
Provision (benefit)
for income taxes
|
|
2,971
|
|
1,903
|
|
(189,704)
|
|
1,084,687
|
Adjusted
EBITDA
|
|
$
489,442
|
|
$
508,816
|
|
$
682,010
|
|
$
996,767
|
Stock-based
compensation expense by function:
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
$
11,724
|
|
$
8,687
|
|
$
45,203
|
|
$
32,020
|
Research and
development
|
|
111,978
|
|
76,406
|
|
381,961
|
|
281,092
|
Sales and
marketing
|
|
28,343
|
|
25,176
|
|
112,990
|
|
98,748
|
General and
administrative
|
|
24,486
|
|
17,915
|
|
89,747
|
|
63,072
|
Total stock-based
compensation expense
|
|
$
176,531
|
|
$
128,184
|
|
$
629,901
|
|
$
474,932
|
Amortization of
acquired intangible assets by function:
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
$
6,953
|
|
$
5,585
|
|
$
28,012
|
|
$
23,569
|
Research and
development
|
|
2,624
|
|
—
|
|
11,812
|
|
—
|
Sales and
marketing
|
|
1,000
|
|
—
|
|
1,400
|
|
—
|
Total amortization of
acquired intangible assets
|
|
$
10,577
|
|
$
5,585
|
|
$
41,224
|
|
$
23,569
|
Non-GAAP costs and
expenses:
|
|
|
|
|
|
|
|
|
Total costs and
expenses
|
|
$
1,399,845
|
|
$
1,037,117
|
|
$
5,570,221
|
|
$
3,689,691
|
Exclude:
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense
|
|
(176,531)
|
|
(128,184)
|
|
(629,901)
|
|
(474,932)
|
Amortization of
acquired intangible assets
|
|
(10,577)
|
|
(5,585)
|
|
(41,224)
|
|
(23,569)
|
Total non-GAAP costs
and expenses
|
|
$
1,212,737
|
|
$
903,348
|
|
$
4,899,096
|
|
$
3,191,190
|
Adjusted free cash
flow:
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities (8)
|
|
$
(528,442)
|
|
$
330,300
|
|
$
632,689
|
|
$
992,870
|
Less: purchases of
property and equipment
|
|
(139,943)
|
|
(295,525)
|
|
(1,011,546)
|
|
(873,354)
|
Plus: proceeds from
sales of property and equipment
|
|
1,549
|
|
3,355
|
|
8,462
|
|
9,170
|
Adjusted free cash
flow
|
|
$
(666,836)
|
|
$
38,130
|
|
$
(370,395)
|
|
$
128,686
|
TWITTER,
INC.
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES
|
(In thousands,
except per share data)
|
(Unaudited)
|
(Continued)
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Adjusted income
from operations:
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
|
$
167,375
|
|
$
251,924
|
|
$
(492,739)
|
|
$
26,658
|
Exclude: litigation
settlement, net (1)
|
|
—
|
|
—
|
|
765,701
|
|
—
|
Adjusted income from
operations
|
|
$
167,375
|
|
$
251,924
|
|
$
272,962
|
|
$
26,658
|
|
|
|
|
|
|
|
|
|
(1) In the
third quarter of 2021, we entered into an agreement to settle a
shareholder class action lawsuit and recorded a charge of $809.5
million partially offset by the recognition of an insurance
recovery of $5.8 million. In addition, during the third quarter we
recorded a benefit for insurance proceeds of $38.0 million related
to the settlement of separate shareholder derivative
lawsuits.
|
(2) In the
second quarter of 2020, we recorded $150 million in general and
administrative expenses in the consolidated statements of
operations related to a draft complaint from the Federal Trade
Commission.
|
(3) We
adopted the new accounting standard update to simplify the
accounting for convertible debt on January 1, 2021 using the
modified retrospective method. The adoption eliminates the non-cash
interest expense related to the conversion features of the
convertible notes beginning in the first quarter of
2021.
|
(4) The
non-GAAP provision for income taxes for the year ended December 31,
2020 includes a provision for income taxes of $1.11 billion related
to the establishment of a valuation allowance against deferred tax
assets.
|
(5) In the
three months ended December 31, 2021, interest expense on the 2024
convertible notes, 2025 convertible notes, and 2026 convertible
notes, net of any income tax effects, are added back to the
numerator for purposes of the if-converted method used to calculate
non-GAAP diluted net income per share upon adoption of the new
accounting standard update to simplify the accounting for
convertible debt as of January 1, 2021. In the year ended December
31, 2021, interest expense on the 2024 convertible notes, net of
any income tax effects, is added back to the numerator for purposes
of the if-converted method used to calculate non-GAAP diluted net
income per share upon adoption of the new accounting standard
update to simplify the accounting for convertible debt as of
January 1, 2021. The 2024 convertible notes are the only
convertible notes with a dilutive effect on the calculation of
non-GAAP diluted net income per share for the year ended December
31, 2021.
|
(6) Gives
effect to potential common stock instruments such as stock options,
RSUs, shares to be issued under ESPP, unvested restricted stocks,
the convertible notes, and warrants. There is no dilutive effect of
the common stock instruments, the convertible notes, or the related
hedge and warrant transactions in the years ended December 31, 2021
and 2020 due to the GAAP net loss position in those periods. GAAP
diluted shares in the three months ended December 31, 2021 reflects
the dilutive effect of the 2024 convertible notes, 2025 convertible
notes, and 2026 convertible notes upon adoption of the new
accounting standard update to simplify the accounting for
convertible debt as of January 1, 2021. There is no dilutive effect
of the notes in the three months ended December 31, 2020, or the
related hedge and warrant transactions in the three months ended
December 31, 2021 and 2020.
|
(7) In the
year ended December 31, 2021, the 2024 convertible notes and
certain of the common stock instruments were included in the
computation of non-GAAP diluted shares as the effect of including
these shares in the calculation is dilutive.
|
(8) Net
cash used in operating activities in the three months ended
December 31, 2021 reflects a $809.5 million payment we made to
settle a shareholder class action lawsuit.
|
TWITTER,
INC.
|
RECONCILIATION OF
GAAP REVENUE TO NON-GAAP CONSTANT CURRENCY REVENUE
|
(In
millions)
|
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Revenue,
advertising revenue, data licensing and other revenue,
international revenue and international advertising revenue
excluding foreign exchange effect (1):
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
1,567
|
|
$
1,289
|
|
$
5,077
|
|
$
3,716
|
Foreign exchange
effect on 2021 revenue using 2020 rates
|
|
16
|
|
|
|
(12)
|
|
|
Revenue excluding
foreign exchange effect
|
|
$
1,583
|
|
|
|
$
5,065
|
|
|
Revenue
year-over-year change percent
|
|
22%
|
|
|
|
37%
|
|
|
Revenue excluding
foreign exchange effect year-over-year change percent
|
|
23%
|
|
|
|
36%
|
|
|
|
|
|
|
|
|
|
|
|
Advertising
revenue
|
|
$
1,413
|
|
$
1,155
|
|
$
4,506
|
|
$
3,207
|
Foreign exchange
effect on 2021 advertising revenue using 2020 rates
|
|
16
|
|
|
|
(12)
|
|
|
Advertising revenue
excluding foreign exchange effect
|
|
$
1,429
|
|
|
|
$
4,494
|
|
|
Advertising revenue
year-over-year change percent
|
|
22%
|
|
|
|
40%
|
|
|
Advertising revenue
excluding foreign exchange effect year-over-year change
percent
|
|
24%
|
|
|
|
40%
|
|
|
|
|
|
|
|
|
|
|
|
Data licensing and
other revenue
|
|
$
154
|
|
$
134
|
|
$
572
|
|
$
509
|
Foreign exchange
effect on 2021 data licensing and other revenue using 2020
rates
|
|
—
|
|
|
|
—
|
|
|
Data licensing and
other revenue excluding foreign exchange effect
|
|
$
154
|
|
|
|
$
572
|
|
|
Data licensing and
other revenue year-over-year change percent
|
|
15%
|
|
|
|
12%
|
|
|
Data licensing and
other revenue excluding foreign exchange effect year-over-year
change percent
|
|
15%
|
|
|
|
12%
|
|
|
|
|
|
|
|
|
|
|
|
International
revenue
|
|
$
683
|
|
$
556
|
|
$
2,242
|
|
$
1,638
|
Foreign exchange
effect on 2021 international revenue using 2020 rates
|
|
16
|
|
|
|
(12)
|
|
|
International revenue
excluding foreign exchange effect
|
|
$
699
|
|
|
|
$
2,230
|
|
|
International revenue
year-over-year change percent
|
|
23%
|
|
|
|
37%
|
|
|
International revenue
excluding foreign exchange effect year-over-year change
percent
|
|
26%
|
|
|
|
36%
|
|
|
|
|
|
|
|
|
|
|
|
International
advertising revenue
|
|
$
628
|
|
$
509
|
|
$
2,047
|
|
$
1,469
|
Foreign exchange
effect on 2021 international advertising revenue using 2020
rates
|
|
16
|
|
|
|
(12)
|
|
|
International
advertising revenue excluding foreign exchange effect
|
|
$
644
|
|
|
|
$
2,035
|
|
|
International
advertising revenue year-over-year change percent
|
|
24%
|
|
|
|
39%
|
|
|
International
advertising revenue excluding foreign exchange effect
year-over-year change percent
|
|
27%
|
|
|
|
39%
|
|
|
|
|
|
|
|
|
|
|
|
(1) The
sum of individual amounts may not always equal total amounts
indicated due to rounding.
|
View original
content:https://www.prnewswire.com/news-releases/twitter-announces-fourth-quarter-and-fiscal-year-2021-results-301479494.html
SOURCE Twitter, Inc.