SAN FRANCISCO, April 26, 2017 /PRNewswire/ -- Twitter, Inc.
(NYSE: TWTR) today announced financial results for its first
quarter 2017.
"We're proud to report accelerating growth in daily active usage
for the fourth consecutive quarter, up 14% year-over-year," said
Jack Dorsey, Twitter's CEO. "We're
delivering on our goal to build a service that people love to use,
every day, and we're encouraged by the audience growth momentum we
saw in the first quarter. While we continue to face revenue
headwinds, we believe that executing on our plan and growing our
audience should result in positive revenue growth over the long
term."
First Quarter 2017 Operational and Financial
Highlights
The company posted first quarter revenue of $548 million, down 8% year-over-year. Quarterly
GAAP net loss was $62 million, or
($0.09) per diluted share, with
quarterly non-GAAP net income of $82
million, or $0.11 per diluted
share. Average monthly active users were 328 million for the
quarter, up 6% year-over-year and compared to 319 million in the
previous quarter. Average daily active usage grew 14%
year-over-year, an acceleration from 11% in the fourth quarter, 7%
in the third quarter, 5% in the second quarter and 3% in the first
quarter of 2016.
"We believe Twitter is the best place to drive brand perception,
and we're continuing to showcase our unique value proposition for
advertisers," said Anthony Noto,
Twitter's COO. "We've received positive early feedback from our ad
partners as we highlight the improved return on investment from our
audience growth and better pricing. We're proud of our performance
in Live after just 6 months – last quarter alone we streamed more
than 800 hours of live premium video and reached 45 million unique
viewers, an increase of 31% from the previous quarter. We remain
focused on our initiatives to grow revenue by simplifying our
revenue product portfolio, communicating our progress to
advertisers, and re-allocating resources to our highest revenue
generating priorities."
Outlook
Twitter today provided guidance for the second quarter and full
year 2017.
Similar to the last two quarters, the company is providing
adjusted EBITDA, adjusted EBITDA margin, and stock-based
compensation expense guidance. Twitter continues to expect
advertising revenue growth to continue to meaningfully lag that of
audience growth in 2017, including in the second quarter.
For the second quarter, Twitter expects:
- Adjusted EBITDA to be between $95
million and $115 million;
- Adjusted EBITDA margin to be between 21% and 21.5%; and
- Stock-based compensation to be between $115 million and $125 million.
Additionally, for the full year 2017, Twitter
expects:
- Total non-GAAP expenses to be flat to down 5%, compared to full
year 2016;
- Stock-based compensation to be down 20% to 25%, compared to
full year 2016; and
- Capital expenditures to be between $300
million and $400 million.
Note that the company's outlook for the second quarter and the
full year 2017 reflects foreign exchange rates as of April 14, 2017.
Twitter's complete first quarter 2017 financial results can
be found by accessing the company's Shareholder Letter
at:
https://investor.twitterinc.com/releases.cfm
Webcast and Conference Call Details
Twitter will host
a conference call today, Wednesday, April
26, 2017, at 5:00 a.m. Pacific
Time (8:00 a.m. Eastern Time)
to discuss financial results. The company will be following the
conversation about the earnings announcement on Twitter. To have
your questions considered during the Q&A, Tweet your 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, @twitter, and @TwitterIR as means of disclosing material
nonpublic information and for complying with its disclosure
obligations under Regulation FD.
About Twitter, Inc.
Twitter, Inc. (NYSE: TWTR) is the
best and fastest place to see what's happening and what people are
talking about all around the world. From breaking news and
entertainment to sports and politics, from big events to everyday
interests. If it's happening anywhere, it's happening first on
Twitter. Twitter is where the full story unfolds with all the live
commentary and where live events come to life unlike anywhere else.
Twitter is available in more than 40 languages around the world.
The service can be accessed at twitter.com, on a variety of mobile
devices and via SMS. For more information, visit about.twitter.com
or follow @twitter.
Forward-Looking Statements
This release contains
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. Forward-looking statements generally relate to future
events or Twitter's future financial or operating performance. In
some cases, you can identify forward-looking statements because
they contain words such as "may," "will," "should," "expects,"
"plans," "anticipates," "going to," "could," "intends," "target,"
"projects," "contemplates," "believes," "estimates," "predicts,"
"potential," or "continue," or the negative of these words or other
similar terms or expressions that concern Twitter's expectations,
strategy, priorities, plans, or intentions. Forward-looking
statements in this release include, but are not limited to,
statements regarding Twitter's future financial and operating
performance, including its outlook and guidance, Twitter's
strategies, product and business plans, including strategies for
increasing shareholder value and improving safety, the development
of, investment in and demand for content, its products, product
features and services, including video, the behavior of Twitter's
users and advertisers, Twitter's expectations regarding the growth
of its revenue, profitability, audience, engagement and
monetization, advertiser base and spending, allocation of
resources, and ad engagements and the impact of re-evaluating
Twitter's revenue product portfolio. 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 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, 2016 filed with the Securities and Exchange Commission.
Additional information will also be set forth in Twitter's
Quarterly Report on Form 10-Q for the quarter ended March 31, 2017. The forward-looking statements in
this release are based on information available to Twitter as of
the date hereof, and Twitter disclaims any obligation to update any
forward-looking statements, except as required by law.
A Note About Metrics
Twitter defines monthly active
users (MAUs) as Twitter users who logged in or were otherwise
authenticated and accessed Twitter through our website, mobile
website, desktop or mobile applications, SMS or registered
third-party applications or websites in the 30-day period ending on
the date of measurement. Average MAUs for a period represent the
average of the MAUs at the end of each month during the period.
Twitter defines daily active users or daily active usage (DAU) as
Twitter users who logged in or were otherwise authenticated and
accessed Twitter through our website, mobile website or mobile
applications on any given day. Average DAU for a period represents
the number of DAUs on each day of such period divided by the number
of days for such period. To calculate the year-over-year change in
DAUs, we subtract the average DAU for the three months ended in the
previous year from the average DAU for the same three months ended
in the current year and divide the result by the average DAU in the
previous year. Prior to Q3 2016, Twitter has discussed DAUs and the
ratio of MAUs to DAUs. In those instances, for comparability and
consistency with MAUs, DAUs also included users who accessed
Twitter through our desktop applications and third-party
properties.
Non-GAAP Financial Measures
To supplement Twitter's
financial information presented in accordance with generally
accepted accounting principles in the
United States of America, or GAAP, Twitter considers certain
financial measures that are not prepared in accordance with GAAP,
including adjusted EBITDA, non-GAAP net income, non-GAAP expenses,
adjusted EBITDA margin, non-GAAP diluted EPS, and adjusted free
cash flow. Twitter defines adjusted EBITDA as net loss adjusted to
exclude stock-based compensation expense, depreciation and
amortization expense, interest and other expenses, net, provision
(benefit) for income taxes, restructuring charges and one-time
nonrecurring gain; Twitter defines non-GAAP net income as net loss
adjusted to exclude stock-based compensation expense, amortization
of acquired intangible assets, non-cash interest expense related to
convertible notes, non-cash expense related to acquisitions, the
income tax effects related to acquisitions, restructuring charges
and one-time nonrecurring gain; and Twitter defines non-GAAP
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. Adjusted
EBITDA margin is calculated by dividing adjusted EBITDA by revenue.
Non-GAAP diluted EPS is calculated by dividing non-GAAP net income
by non-GAAP share count. Non-GAAP share count is GAAP 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. 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 capital leases, less proceeds received
from 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 uses the non-GAAP financial measures of adjusted EBITDA,
non-GAAP net income, non-GAAP expenses, adjusted EBITDA margin and
non-GAAP diluted EPS in evaluating its operating results and for
financial and operational decision-making purposes. Twitter
believes that adjusted EBITDA, non-GAAP net income, non-GAAP
expenses, adjusted EBITDA margin and non-GAAP diluted EPS help
identify underlying trends in its business that could otherwise be
masked by the effect of the expenses that it excludes in adjusted
EBITDA, non-GAAP net income, non-GAAP expenses, adjusted EBITDA
margin, and non-GAAP diluted EPS. Twitter also believes that
adjusted EBITDA, non-GAAP net income, non-GAAP expenses, adjusted
EBITDA margin, and non-GAAP diluted EPS provide useful information
about its operating results, enhance the overall understanding of
Twitter's past performance and future prospects, and allow for
greater transparency with respect to key metrics used by Twitter's
management in its financial and operational decision-making.
Twitter uses these measures to establish budgets and operational
goals for managing its business and evaluating its performance. 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:
Kristin Binns
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,
|
|
2017
|
|
|
2016
|
Net loss and net
loss per share:
|
|
|
|
|
|
|
Net loss
|
$
|
(61,559)
|
|
|
$
|
(79,731)
|
Weighted-average
shares used to compute net loss per share:
|
|
|
|
|
|
|
Basic and
diluted
|
|
722,048
|
|
|
|
691,564
|
Net loss per
share:
|
|
|
|
|
|
|
Basic and
diluted
|
$
|
(0.09)
|
|
|
$
|
(0.12)
|
Non-GAAP net
income and net income per share:
|
|
|
|
|
|
|
Net loss
|
$
|
(61,559)
|
|
|
$
|
(79,731)
|
Stock-based
compensation expense
|
|
116,997
|
|
|
|
150,916
|
Amortization of
acquired intangible assets
|
|
16,191
|
|
|
|
12,730
|
Non-cash interest
expense related to convertible notes
|
|
19,248
|
|
|
|
18,370
|
Income tax effects
related to acquisitions (1)
|
|
1,099
|
|
|
|
391
|
Restructuring charges
and one-time nonrecurring gain
|
|
(9,572)
|
|
|
|
47
|
Non-GAAP net
income
|
$
|
82,404
|
|
|
$
|
102,723
|
GAAP diluted
shares
|
|
722,048
|
|
|
|
691,564
|
Dilutive equity awards
(2)
|
|
8,675
|
|
|
|
10,433
|
Non-GAAP diluted
shares
|
|
730,723
|
|
|
|
701,997
|
Non-GAAP diluted net
income per share
|
$
|
0.11
|
|
|
$
|
0.15
|
|
|
|
|
|
|
|
(1) The
current and deferred income tax effects related to non-GAAP
adjustments are comprised of the tax expense related to the
amortization of
acquired intangible assets in certain foreign jurisdictions and
stock-based compensation related to certain foreign
acquisitions.
|
(2) Gives
effect to potential common stock instruments such as stock options,
RSUs, shares to be issued under ESPP, unvested restricted stock
and
warrant. There is no dilutive effect of the notes nor the related
hedge and warrant transactions.
|
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SOURCE Twitter, Inc.