SAN FRANCISCO, Feb. 6, 2020 /PRNewswire/ -- Twitter, Inc.
(NYSE: TWTR) today announced financial results for its fourth
quarter and fiscal year 2019.
"2019 was a great year for Twitter. Our work to increase
relevance and ease of use delivered 21% mDAU growth in Q4, with
more than half of the 26 million mDAU added in 2019 directly driven
by product improvements," said Jack
Dorsey, Twitter's CEO. "Entering 2020, we are building on
our momentum -- learning faster, prioritizing better, shipping more
and hiring remarkable talent. All of which put us in a stronger
position as we address the challenges and opportunities ahead."
"We reached a new milestone in Q4 with quarterly revenue in
excess of $1 billion, reflecting
steady progress on revenue product and solid performance across
most major geographies, with particular strength in US
advertising," said Ned Segal,
Twitter's CFO. "We continue to see tremendous opportunity to get
the whole world to use Twitter and provide a more personalized
experience across both organic and promoted content, delivering
increasing value for both consumers and advertisers."
Fiscal Year 2019 Operational and Financial
Highlights
- 2019 revenue was $3.46 billion,
an increase of 14% year-over-year. On a constant currency basis,
revenue grew 15% year-over-year.
- 2019 costs and expenses totaled $3.09
billion, an increase of 19% year-over-year. This resulted in
operating income of $366 million and
11% operating margin.
- 2019 net income was $1.47
billion, representing a net margin of 42% and diluted EPS of
$1.87. This compares to 2018 net
income of $1.21 billion, representing
a net margin of 40% and diluted EPS of $1.56.
-
- In 2019, excluding the income tax benefit from the
establishment of deferred tax assets related to intra-entity
transfers of intangible assets of $1.21
billion, we generated adjusted net income of $259 million, adjusted net margin of 7%, and
adjusted diluted EPS of $0.33.
- In 2018, excluding the income tax benefit from the release of
deferred tax assets valuation allowance of $845 million, adjusted net income was
$360 million, with adjusted net
margin of 12% and adjusted diluted EPS of $0.47.
Fourth Quarter 2019 Operational and Financial
Highlights
- Q4 revenue totaled $1.01 billion,
an increase of 11% year-over-year.
-
- Advertising revenue totaled $885
million, an increase of 12% year-over-year.
-
- Total ad engagements increased 29% year-over-year.
- Cost per engagement (CPE) decreased 13% year-over-year.
- Data licensing and other revenue totaled $123 million, an increase of 5%
year-over-year.
- US revenue totaled $591 million,
an increase of 17% year-over-year.
- International revenue totaled $416
million, an increase of 3% year-over-year.
- Q4 costs and expenses totaled $854
million, an increase of 22% year-over-year. This resulted in
operating income of $153 million and
15% operating margin.
- Q4 net income was $119 million,
representing a net margin of 12% and diluted EPS of $0.15. This compares to net income of
$255 million, a net margin of 28% and
diluted EPS of $0.33 in the same
period of the previous year. Excluding the income tax benefit from
the release of deferred tax assets valuation allowance in the same
period last year, adjusted net income was $135 million, with adjusted net margin of 15% and
adjusted diluted EPS of $0.17.
- Average monetizable daily active users (mDAU) were 152 million
for Q4, compared to 126 million in the same period of the previous
year and compared to 145 million in the previous quarter.
-
- Average US mDAU were 31 million for Q4, compared to 27 million
in the same period of the previous year and compared to 30 million
in the previous quarter.
- Average international mDAU were 121 million for Q4, compared to
99 million in the same period of the previous year and compared to
115 million in the previous quarter.
Outlook
As we enter 2020, we are focused on four objectives to drive our
work. These are similar to previous years, and our success will
best be measured externally by our ability to grow our audience and
deliver financial results in line with our guidance. Our company
objectives are:
- Increasing development velocity and trust
- Increasing healthy public conversation
- Increasing revenue durability
- Enabling anyone, anywhere to work at Twitter
To support these objectives, we expect to grow headcount by 20%
or more in 2020, especially in engineering, product, design, and
research. Given investment decisions made in previous years and
anticipated 2020 headcount growth, we expect total costs and
expenses (which include cost of revenue and all operating expenses)
to grow approximately 20% in 2020, ramping in absolute dollars over
the course of the year.
Our investments also include building out a new data center in
2020 to add capacity to support audience and revenue growth. While
the timing of these investments will be variable and spread out
over multiple quarters, we expect capital expenditures to be
weighted toward the second half of the year.
For Q1, we expect:
- Total revenue to be between $825
million and $885 million
- Operating income to be between $0
million and $30 million
For FY 2020, we expect:
- Stock-based compensation expense to be between $425 million and $475
million
- Capital expenditures to be between $775
million and $825
million
Note that our outlook for Q1 and the full year 2020 reflects
foreign exchange rates as of January
2020. For more information regarding the non-GAAP financial
measures discussed in this letter, please see "Non-GAAP Financial
Measures" and "Reconciliation of GAAP to Non-GAAP Financial
Measures" below.
Appendix
Fourth Quarter and Full Year 2019 Webcast and Conference Call
Details
Twitter will host a conference call today,
Thursday, February 6, 2020, at
5am Pacific Time (8am Eastern Time) to discuss financial results
for the fourth quarter and full fiscal year 2019. The company will
be following the conversation about the earnings announcement on
Twitter. To have your questions considered during the Q&A,
Tweet your question to @TwitterIR using $TWTR. To listen to a live
audio webcast, please visit the company's Investor Relations page
at investor.twitterinc.com. Twitter has used, and intends to
continue to use, its Investor Relations website and the Twitter
accounts of @jack, @nedsegal, @Twitter, and @TwitterIR as means of
disclosing material nonpublic information and for complying with
its disclosure obligations under Regulation FD.
First Quarter Earnings Release Details
Twitter
expects to release financial results for the first quarter of 2020
on April 30, 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([1]) (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.
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 2019 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.
(1) Please note
that in Q4'19, in an effort to demonstrate more empathy for the
people who use Twitter, we largely discontinued the use of the word
"user" in our external communications, including in our earnings
reports and SEC filings. The underlying definitions for our metrics
did not change.
|
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. 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.
Forward-Looking Statements
This press release
contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Forward-looking statements generally relate
to future events or Twitter's future financial or operating
performance. In some cases, you can identify forward-looking
statements because they contain words such as "may," "will,"
"should," "expects," "plans," "anticipates," "going to," "could,"
"intends," "target," "projects," "contemplates," "believes,"
"estimates," "predicts," "potential," or "continue," or the
negative of these words or other similar terms or expressions that
concern Twitter's expectations, strategy, priorities, plans, or
intentions. Forward-looking statements in this press release
include, but are not limited to, statements regarding Twitter's
future financial and operating performance, including its outlook,
guidance and strategies to improve financial and operating
performance; Twitter's opportunity; Twitter's anticipated
strategies, and product and business plans, including its
priorities, product initiatives, Twitter's objectives going into
2020 and its strategies and ability to achieve these objectives,
and Twitter's expectations regarding future capital expenditures
and other expenses, including headcount growth, and the timing of
these expenditures. 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 and fail to drive mDAU growth; advertisers reduce or
discontinue their spending on Twitter; data partners reduce or
discontinue their purchases of data licenses from Twitter; and
Twitter experiences expenses that exceed its expectations. The
forward-looking statements contained in this press release are also
subject to other risks and uncertainties, including those more
fully described in Twitter's Annual Report on Form 10-K for the
fiscal year ended December 31, 2018,
and Quarterly Reports on Form 10-Q for the quarters ended
March 31, 2019, June 30, 2019, and September 30, 2019, 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, 2019.
The forward-looking statements in this press release are based on
information available to Twitter as of the date hereof, and Twitter
disclaims any obligation to update any forward-looking statements,
except as required by law.
Non-GAAP Financial Measures
To supplement Twitter's financial information presented in
accordance with generally accepted accounting principles in
the United States of America, or
GAAP, Twitter considers certain financial measures that are not
prepared in accordance with GAAP, including revenues excluding
foreign exchange effect, which we refer to as on a constant
currency basis, non-GAAP income before income taxes, non-GAAP
provision (benefit) for income taxes, non-GAAP net income, non-GAAP
diluted net income per share, adjusted EBITDA, non-GAAP costs and
expenses, adjusted net income, adjusted net margin, adjusted
diluted net income per share, and adjusted free cash flow. In order
to present revenues on a constant currency basis for the fiscal
quarter and year ended December 31,
2019, 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 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 as net income adjusted to exclude
stock-based compensation expense, amortization of acquired
intangible assets, non-cash interest expense related to convertible
notes, non-cash expense related to acquisitions, impairment (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 per
share is calculated by dividing non-GAAP net income by GAAP diluted
share count. Twitter defines adjusted EBITDA as net income adjusted
to exclude stock-based compensation expense, depreciation and
amortization expense, interest and other expense, net, provision
(benefit) for income taxes, 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 solely to exclude the income tax
benefit from the establishment of deferred tax assets related to
intra-entity transfers of intangible assets in the year ended
December 31, 2019, and related to the
release of deferred tax assets valuation allowance in the quarter
and year ended December 31, 2018, and
no other adjustments were made in the calculation of these
measures. Adjusted net margin is calculated by dividing adjusted
net income by GAAP revenue. Adjusted diluted net income per share
is calculated by dividing adjusted net income by GAAP 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, non-GAAP diluted net income
per share, adjusted EBITDA, non-GAAP costs and expenses, adjusted
net income, adjusted net margin, and adjusted dilutive net income
per share provide useful information about its operating results,
enhance the overall understanding of Twitter's past performance and
future prospects, and allow for greater transparency with respect
to key metrics used by Twitter's management in its financial and
operational decision-making. Twitter uses these measures to
establish budgets and operational goals for managing its business
and evaluating its performance. Twitter believes that revenues on a
constant currency basis is a useful metric that facilitates
comparison to its historical performance. Twitter believes that
non-GAAP net income, non-GAAP diluted net income per share,
adjusted EBITDA, non-GAAP costs and expenses, adjusted net income,
adjusted net margin, and adjusted diluted net income per share help
identify underlying trends in its business that could otherwise be
masked by expenses and one-time gains or charges that it excludes
in non-GAAP net income, non-GAAP diluted net income per share,
adjusted EBITDA, non-GAAP costs and expenses, adjusted net income,
adjusted net margin, and adjusted diluted net income per share, or
the effect of the one-time income tax benefits related to the
establishment of deferred tax assets or the release of deferred tax
assets valuation allowance described above, which are non-operating
benefits. 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)
|
|
|
|
December 31,
2019
|
|
December 31,
2018
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
1,799,082
|
|
|
$
|
1,894,444
|
|
Short-term
investments
|
|
4,839,970
|
|
|
4,314,957
|
|
Accounts receivable,
net
|
|
850,184
|
|
|
788,700
|
|
Prepaid expenses and
other current assets
|
|
130,839
|
|
|
112,935
|
|
Total current
assets
|
|
7,620,075
|
|
|
7,111,036
|
|
Property and
equipment, net
|
|
1,031,781
|
|
|
885,078
|
|
Operating lease
right-of-use assets
|
|
697,095
|
|
|
—
|
|
Intangible assets,
net
|
|
55,106
|
|
|
45,025
|
|
Goodwill
|
|
1,256,699
|
|
|
1,227,269
|
|
Deferred tax assets,
net
|
|
1,908,086
|
|
|
808,459
|
|
Other
assets
|
|
134,547
|
|
|
85,705
|
|
Total
assets
|
|
$
|
12,703,389
|
|
|
$
|
10,162,572
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
161,148
|
|
|
$
|
145,186
|
|
Accrued and other
current liabilities
|
|
500,893
|
|
|
405,751
|
|
Convertible notes,
short-term
|
|
—
|
|
|
897,328
|
|
Operating lease
liabilities, short-term
|
|
146,959
|
|
|
—
|
|
Finance lease
liabilities, short-term
|
|
23,476
|
|
|
68,046
|
|
Total current
liabilities
|
|
832,476
|
|
|
1,516,311
|
|
Convertible notes,
long-term
|
|
1,816,833
|
|
|
1,730,922
|
|
Senior notes,
long-term
|
|
691,967
|
|
|
—
|
|
Operating lease
liabilities, long-term
|
|
609,245
|
|
|
—
|
|
Finance lease
liabilities, long-term
|
|
205
|
|
|
24,394
|
|
Deferred and other
long-term tax liabilities, net
|
|
24,170
|
|
|
17,849
|
|
Other long-term
liabilities
|
|
24,107
|
|
|
67,502
|
|
Total
liabilities
|
|
3,999,003
|
|
|
3,356,978
|
|
Stockholders'
equity:
|
|
|
|
|
Common
stock
|
|
4
|
|
|
4
|
|
Additional paid-in
capital
|
|
8,763,330
|
|
|
8,324,974
|
|
Accumulated other
comprehensive loss
|
|
(70,534)
|
|
|
(65,311)
|
|
Retained earnings
(accumulated deficit)
|
|
11,586
|
|
|
(1,454,073)
|
|
Total stockholders'
equity
|
|
8,704,386
|
|
|
6,805,594
|
|
Total liabilities and
stockholders' equity
|
|
$
|
12,703,389
|
|
|
$
|
10,162,572
|
|
|
|
|
|
|
|
|
|
|
|
TWITTER,
INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
|
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Revenue
|
|
$
|
1,007,341
|
|
|
$
|
908,836
|
|
|
$
|
3,459,329
|
|
|
$
|
3,042,359
|
|
Costs and
expenses
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
314,008
|
|
|
268,345
|
|
|
1,137,041
|
|
|
964,997
|
|
Research and
development
|
|
198,240
|
|
|
141,174
|
|
|
682,281
|
|
|
553,858
|
|
Sales and
marketing
|
|
241,561
|
|
|
211,774
|
|
|
913,813
|
|
|
771,361
|
|
General and
administrative
|
|
100,648
|
|
|
80,635
|
|
|
359,821
|
|
|
298,818
|
|
Total costs and
expenses
|
|
854,457
|
|
|
701,928
|
|
|
3,092,956
|
|
|
2,589,034
|
|
Income from
operations
|
|
152,884
|
|
|
206,908
|
|
|
366,373
|
|
|
453,325
|
|
Interest
expense
|
|
(26,377)
|
|
|
(37,273)
|
|
|
(138,180)
|
|
|
(132,606)
|
|
Interest
income
|
|
33,927
|
|
|
37,013
|
|
|
157,703
|
|
|
111,221
|
|
Other income
(expense), net
|
|
(2,340)
|
|
|
(111)
|
|
|
4,243
|
|
|
(8,396)
|
|
Income before income
taxes
|
|
158,094
|
|
|
206,537
|
|
|
390,139
|
|
|
423,544
|
|
Provision (benefit)
for income taxes
|
|
39,321
|
|
|
(48,766)
|
|
|
(1,075,520)
|
|
|
(782,052)
|
|
Net income
|
|
$
|
118,773
|
|
|
$
|
255,303
|
|
|
$
|
1,465,659
|
|
|
$
|
1,205,596
|
|
Net income per
share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.15
|
|
|
$
|
0.34
|
|
|
$
|
1.90
|
|
|
$
|
1.60
|
|
Diluted
|
|
$
|
0.15
|
|
|
$
|
0.33
|
|
|
$
|
1.87
|
|
|
$
|
1.56
|
|
Weighted-average
shares used to compute net income per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
776,647
|
|
|
760,525
|
|
|
770,729
|
|
|
754,326
|
|
Diluted
|
|
788,684
|
|
|
776,129
|
|
|
785,531
|
|
|
772,686
|
|
TWITTER,
INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (In thousands)
(Unaudited)
|
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Cash flows from
operating activities
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
118,773
|
|
|
$
|
255,303
|
|
|
$
|
1,465,659
|
|
|
$
|
1,205,596
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization expense
|
|
116,473
|
|
|
110,723
|
|
|
465,549
|
|
|
425,498
|
|
Stock-based
compensation expense
|
|
101,296
|
|
|
81,887
|
|
|
378,025
|
|
|
326,228
|
|
Amortization of
discount on convertible notes
|
|
20,047
|
|
|
31,017
|
|
|
113,298
|
|
|
105,926
|
|
Deferred income
taxes
|
|
15,782
|
|
|
66,481
|
|
|
84,369
|
|
|
43,409
|
|
Deferred tax assets
valuation allowance release
|
|
—
|
|
|
(119,835)
|
|
|
—
|
|
|
(845,129)
|
|
Deferred tax assets
establishment related to intra-entity transfers of intangible
assets
|
|
—
|
|
|
—
|
|
|
(1,206,880)
|
|
|
—
|
|
Impairment of
investments in privately-held companies
|
|
—
|
|
|
—
|
|
|
1,550
|
|
|
3,000
|
|
Other
adjustments
|
|
(3,065)
|
|
|
(8,301)
|
|
|
(16,906)
|
|
|
(14,139)
|
|
Changes in assets and
liabilities, net of assets acquired and liabilities assumed from
acquisitions:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
(160,932)
|
|
|
(166,260)
|
|
|
(67,000)
|
|
|
(130,871)
|
|
Prepaid expenses and
other assets
|
|
(8,386)
|
|
|
23,236
|
|
|
(29,602)
|
|
|
126,470
|
|
Operating lease
right-of-use assets
|
|
45,018
|
|
|
—
|
|
|
149,880
|
|
|
—
|
|
Accounts
payable
|
|
15,545
|
|
|
21,057
|
|
|
2,946
|
|
|
(1,533)
|
|
Accrued and other
liabilities
|
|
52,303
|
|
|
36,691
|
|
|
92,681
|
|
|
95,256
|
|
Operating lease
liabilities
|
|
(35,675)
|
|
|
—
|
|
|
(130,205)
|
|
|
—
|
|
Net cash provided by
operating activities
|
|
277,179
|
|
|
331,999
|
|
|
1,303,364
|
|
|
1,339,711
|
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
(151,615)
|
|
|
(74,021)
|
|
|
(540,688)
|
|
|
(483,934)
|
|
Proceeds from sales of
property and equipment
|
|
1,868
|
|
|
4,943
|
|
|
6,158
|
|
|
13,070
|
|
Purchases of
marketable securities
|
|
(1,857,429)
|
|
|
(1,280,084)
|
|
|
(5,798,111)
|
|
|
(5,334,396)
|
|
Proceeds from
maturities of marketable securities
|
|
776,235
|
|
|
982,546
|
|
|
4,928,097
|
|
|
3,732,973
|
|
Proceeds from sales of
marketable securities
|
|
193,791
|
|
|
16,590
|
|
|
367,116
|
|
|
58,721
|
|
Purchases of
investments in privately-held companies
|
|
—
|
|
|
(1,200)
|
|
|
(51,163)
|
|
|
(3,375)
|
|
Proceeds from sales of
long-lived assets
|
|
—
|
|
|
—
|
|
|
11,781
|
|
|
—
|
|
Business combinations,
net of cash acquired
|
|
(9,362)
|
|
|
—
|
|
|
(29,664)
|
|
|
(33,572)
|
|
Other investing
activities
|
|
—
|
|
|
(5,000)
|
|
|
(9,500)
|
|
|
(5,000)
|
|
Net cash used in
investing activities
|
|
(1,046,512)
|
|
|
(356,226)
|
|
|
(1,115,974)
|
|
|
(2,055,513)
|
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
|
Proceeds from issuance
of senior notes
|
|
700,000
|
|
|
—
|
|
|
700,000
|
|
|
—
|
|
Proceeds from issuance
of convertible notes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,150,000
|
|
Purchases of
convertible note hedges
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(267,950)
|
|
Proceeds from issuance
of warrants concurrent with note hedges
|
|
—
|
|
|
—
|
|
|
—
|
|
|
186,760
|
|
Debt issuance
costs
|
|
(8,070)
|
|
|
(300)
|
|
|
(8,070)
|
|
|
(13,783)
|
|
Repayment of
convertible notes
|
|
—
|
|
|
—
|
|
|
(935,000)
|
|
|
—
|
|
Taxes paid related to
net share settlement of equity awards
|
|
(2,899)
|
|
|
(3,083)
|
|
|
(19,594)
|
|
|
(19,263)
|
|
Payments of finance
lease obligations
|
|
(13,050)
|
|
|
(20,847)
|
|
|
(66,677)
|
|
|
(90,351)
|
|
Proceeds from exercise
of stock options
|
|
35
|
|
|
164
|
|
|
788
|
|
|
3,415
|
|
Proceeds from
issuances of common stock under employee stock purchase
plan
|
|
17,169
|
|
|
12,951
|
|
|
42,378
|
|
|
29,288
|
|
Net cash provided by
(used in) financing activities
|
|
693,185
|
|
|
(11,115)
|
|
|
(286,175)
|
|
|
978,116
|
|
Net increase
(decrease) in cash, cash equivalents and restricted cash
|
|
(76,148)
|
|
|
(35,342)
|
|
|
(98,785)
|
|
|
262,314
|
|
Foreign exchange
effect on cash, cash equivalents and restricted cash
|
|
6,366
|
|
|
915
|
|
|
4,576
|
|
|
(14,296)
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
|
1,897,448
|
|
|
1,956,302
|
|
|
1,921,875
|
|
|
1,673,857
|
|
Cash, cash
equivalents and restricted cash at end of period
|
|
$
|
1,827,666
|
|
|
$
|
1,921,875
|
|
|
$
|
1,827,666
|
|
|
$
|
1,921,875
|
|
Supplemental cash
flow data
|
|
|
|
|
|
|
|
|
Income taxes paid in
cash
|
|
$
|
5,778
|
|
|
$
|
6,244
|
|
|
$
|
20,144
|
|
|
$
|
33,065
|
|
Supplemental
disclosures of non-cash investing and financing
activities
|
|
|
|
|
|
|
|
|
Common stock issued in
connection with acquisitions
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19,165
|
|
Equipment purchases
under finance leases
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16,086
|
|
Changes in accrued
property and equipment purchases
|
|
$
|
(11,694)
|
|
|
$
|
5,148
|
|
|
$
|
14,985
|
|
|
$
|
(23,469)
|
|
Reconciliation of
cash, cash equivalents and restricted cash as shown in the
consolidated
statements of cash flows
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
1,799,082
|
|
|
$
|
1,894,444
|
|
|
$
|
1,799,082
|
|
|
$
|
1,894,444
|
|
Restricted cash
included in prepaid expenses and other current assets
|
|
1,862
|
|
|
1,698
|
|
|
1,862
|
|
|
1,698
|
|
Restricted cash
included in other assets
|
|
26,722
|
|
|
25,733
|
|
|
26,722
|
|
|
25,733
|
|
Total cash, cash
equivalents and restricted cash
|
|
$
|
1,827,666
|
|
|
$
|
1,921,875
|
|
|
$
|
1,827,666
|
|
|
$
|
1,921,875
|
|
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,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Non-GAAP net
income and net income per share:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
118,773
|
|
|
$
|
255,303
|
|
|
$
|
1,465,659
|
|
|
$
|
1,205,596
|
|
Exclude: Provision
(benefit) for income taxes
|
|
39,321
|
|
|
(48,766)
|
|
|
(1,075,520)
|
|
|
(782,052)
|
|
Income before income
taxes
|
|
158,094
|
|
|
206,537
|
|
|
390,139
|
|
|
423,544
|
|
Stock-based
compensation expense
|
|
101,296
|
|
|
81,887
|
|
|
378,025
|
|
|
326,228
|
|
Amortization of
acquired intangible assets
|
|
4,034
|
|
|
4,786
|
|
|
16,543
|
|
|
18,984
|
|
Non-cash interest
expense related to convertible notes
|
|
20,047
|
|
|
31,017
|
|
|
113,298
|
|
|
105,926
|
|
Impairment (gain) on
investments in privately-held companies
|
|
—
|
|
|
—
|
|
|
(8,611)
|
|
|
3,000
|
|
Restructuring
charges
|
|
—
|
|
|
(2,989)
|
|
|
(217)
|
|
|
(4,255)
|
|
Non-GAAP income before
income taxes
|
|
283,471
|
|
|
321,238
|
|
|
889,177
|
|
|
873,427
|
|
Non-GAAP provision
(benefit) for income taxes(1)
|
|
87,859
|
|
|
77,097
|
|
|
(970,493)
|
|
|
209,623
|
|
Non-GAAP net
income
|
|
$
|
195,612
|
|
|
$
|
244,141
|
|
|
$
|
1,859,670
|
|
|
$
|
663,804
|
|
GAAP diluted
shares
|
|
788,684
|
|
|
776,129
|
|
|
785,531
|
|
|
772,686
|
|
Non-GAAP diluted net
income per share
|
|
$
|
0.25
|
|
|
$
|
0.31
|
|
|
$
|
2.37
|
|
|
$
|
0.86
|
|
Adjusted
EBITDA:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
118,773
|
|
|
$
|
255,303
|
|
|
$
|
1,465,659
|
|
|
$
|
1,205,596
|
|
Stock-based
compensation expense
|
|
101,296
|
|
|
81,887
|
|
|
378,025
|
|
|
326,228
|
|
Depreciation and
amortization expense
|
|
116,473
|
|
|
110,723
|
|
|
465,549
|
|
|
425,498
|
|
Interest and other
expense, net
|
|
(5,210)
|
|
|
371
|
|
|
(23,766)
|
|
|
29,781
|
|
Provision (benefit)
for income taxes
|
|
39,321
|
|
|
(48,766)
|
|
|
(1,075,520)
|
|
|
(782,052)
|
|
Restructuring
charges
|
|
—
|
|
|
(2,989)
|
|
|
(217)
|
|
|
(4,255)
|
|
Adjusted
EBITDA
|
|
$
|
370,653
|
|
|
$
|
396,529
|
|
|
$
|
1,209,730
|
|
|
$
|
1,200,796
|
|
Stock-based
compensation expense by function:
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
$
|
6,019
|
|
|
$
|
4,905
|
|
|
$
|
22,797
|
|
|
$
|
17,289
|
|
Research and
development
|
|
59,564
|
|
|
43,589
|
|
|
209,063
|
|
|
183,799
|
|
Sales and
marketing
|
|
21,717
|
|
|
18,624
|
|
|
85,739
|
|
|
71,305
|
|
General and
administrative
|
|
13,996
|
|
|
14,769
|
|
|
60,426
|
|
|
53,835
|
|
Total stock-based
compensation expense
|
|
$
|
101,296
|
|
|
$
|
81,887
|
|
|
$
|
378,025
|
|
|
$
|
326,228
|
|
Amortization of
acquired intangible assets by function:
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
$
|
4,034
|
|
|
$
|
4,321
|
|
|
$
|
15,923
|
|
|
$
|
17,124
|
|
Sales and
marketing
|
|
—
|
|
|
465
|
|
|
620
|
|
|
1,860
|
|
Total amortization of
acquired intangible assets
|
|
$
|
4,034
|
|
|
$
|
4,786
|
|
|
$
|
16,543
|
|
|
$
|
18,984
|
|
Restructuring
charges by function:
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
$
|
—
|
|
|
$
|
(179)
|
|
|
$
|
(13)
|
|
|
$
|
(257)
|
|
Research and
development
|
|
—
|
|
|
(1,011)
|
|
|
(73)
|
|
|
(1,436)
|
|
Sales and
marketing
|
|
—
|
|
|
(1,208)
|
|
|
(87)
|
|
|
(1,722)
|
|
General and
administrative
|
|
—
|
|
|
(591)
|
|
|
(44)
|
|
|
(840)
|
|
Total restructuring
charges
|
|
$
|
—
|
|
|
$
|
(2,989)
|
|
|
$
|
(217)
|
|
|
$
|
(4,255)
|
|
Non-GAAP costs and
expenses:
|
|
|
|
|
|
|
|
|
Total costs and
expenses
|
|
$
|
854,457
|
|
|
$
|
701,928
|
|
|
$
|
3,092,956
|
|
|
$
|
2,589,034
|
|
Less: stock-based
compensation expense
|
|
(101,296)
|
|
|
(81,887)
|
|
|
(378,025)
|
|
|
(326,228)
|
|
Less: amortization of
acquired intangible assets
|
|
(4,034)
|
|
|
(4,786)
|
|
|
(16,543)
|
|
|
(18,984)
|
|
Less: restructuring
charges
|
|
—
|
|
|
2,989
|
|
|
217
|
|
|
4,255
|
|
Total non-GAAP costs
and expenses
|
|
$
|
749,127
|
|
|
$
|
618,244
|
|
|
$
|
2,698,605
|
|
|
$
|
2,248,077
|
|
Adjusted free cash
flow:
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
|
277,179
|
|
|
$
|
331,999
|
|
|
$
|
1,303,364
|
|
|
$
|
1,339,711
|
|
Less: purchases of
property and equipment
|
|
(151,615)
|
|
|
(74,021)
|
|
|
(540,688)
|
|
|
(483,934)
|
|
Plus: proceeds from
sales of property and equipment
|
|
1,868
|
|
|
4,943
|
|
|
6,158
|
|
|
13,070
|
|
Less: equipment
purchases under finance leases
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,086)
|
|
Adjusted free cash
flow
|
|
$
|
127,432
|
|
|
$
|
262,921
|
|
|
$
|
768,834
|
|
|
$
|
852,761
|
|
Adjusted net
income and adjusted diluted net income per share:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
118,773
|
|
|
$
|
255,303
|
|
|
$
|
1,465,659
|
|
|
$
|
1,205,596
|
|
Exclude: benefit from
deferred tax assets (2)
|
|
—
|
|
|
(119,835)
|
|
|
(1,206,880)
|
|
|
(845,129)
|
|
Adjusted net
income
|
|
$
|
118,773
|
|
|
$
|
135,468
|
|
|
$
|
258,779
|
|
|
$
|
360,467
|
|
GAAP diluted
shares
|
|
788,684
|
|
|
776,129
|
|
|
785,531
|
|
|
772,686
|
|
Adjusted diluted net
income per share
|
|
$
|
0.15
|
|
|
$
|
0.17
|
|
|
$
|
0.33
|
|
|
$
|
0.47
|
|
|
|
|
|
|
|
|
|
|
(1) The
non-GAAP benefit from income taxes for the year ended December 31,
2019 includes a benefit of $1.21 billion from the establishment of
deferred tax assets from intra-entity transfers of intangible
assets.
|
|
(2) The benefit from deferred tax
asset in the year ended December 31, 2019 is primarily related to
the establishment of deferred tax assets from intra-entity
transfers of intangible assets. The benefit from deferred tax
assets valuation allowance release in the three months ended
December 31, 2018 represents the change in estimate for the full
year realization of our deferred tax assets. The benefit from
deferred tax assets in the year ended December 31, 2018 is
primarily due to income tax benefits primarily driven by the
release of deferred tax assets valuation allowance for the United
States and Brazil.
|
TWITTER,
INC. RECONCILIATION OF GAAP REVENUE TO NON-GAAP CONSTANT
CURRENCY REVENUE (In
millions) (Unaudited)
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Revenue,
advertising revenue, data licensing and other revenue,
international
revenue and international advertising revenue excluding foreign
exchange
effect:
|
|
|
|
|
|
|
|
|
Revenue(1)
|
|
$
|
1,007
|
|
|
$
|
909
|
|
|
$
|
3,459
|
|
|
$
|
3,042
|
|
Foreign exchange
effect on 2019 revenue using 2018 rates
|
|
(1)
|
|
|
|
|
26
|
|
|
|
Revenue excluding
foreign exchange effect
|
|
$
|
1,006
|
|
|
|
|
$
|
3,485
|
|
|
|
Revenue
year-over-year change percent
|
|
11
|
%
|
|
|
|
14
|
%
|
|
|
Revenue excluding
foreign exchange effect year-over-year change percent
|
|
11
|
%
|
|
|
|
15
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Advertising
revenue
|
|
$
|
885
|
|
|
$
|
791
|
|
|
$
|
2,993
|
|
|
$
|
2,617
|
|
Foreign exchange
effect on 2019 advertising revenue using 2018 rates
|
|
(1)
|
|
|
|
|
26
|
|
|
|
Advertising revenue
excluding foreign exchange effect
|
|
$
|
884
|
|
|
|
|
$
|
3,019
|
|
|
|
Advertising revenue
year-over-year change percent
|
|
12
|
%
|
|
|
|
14
|
%
|
|
|
Advertising revenue
excluding foreign exchange effect year-over-year change
percent
|
|
12
|
%
|
|
|
|
15
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Data licensing and
other revenue
|
|
$
|
123
|
|
|
$
|
118
|
|
|
$
|
466
|
|
|
$
|
425
|
|
Foreign exchange
effect on 2019 data licensing and other revenue using 2018
rates
|
|
—
|
|
|
|
|
—
|
|
|
|
Data licensing and
other revenue excluding foreign exchange effect
|
|
$
|
123
|
|
|
|
|
$
|
466
|
|
|
|
Data licensing and
other revenue year-over-year change percent
|
|
5
|
%
|
|
|
|
10
|
%
|
|
|
Data licensing and
other revenue excluding foreign exchange effect year-over-year
change percent
|
|
5
|
%
|
|
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
|
|
International
revenue
|
|
$
|
416
|
|
|
$
|
403
|
|
|
$
|
1,515
|
|
|
$
|
1,400
|
|
Foreign exchange
effect on 2019 international revenue using 2018 rates
|
|
(1)
|
|
|
|
|
26
|
|
|
|
International revenue
excluding foreign exchange effect
|
|
$
|
415
|
|
|
|
|
$
|
1,541
|
|
|
|
International revenue
year-over-year change percent
|
|
3
|
%
|
|
|
|
8
|
%
|
|
|
International revenue
excluding foreign exchange effect year-over-year change
percent
|
|
3
|
%
|
|
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
|
|
International
advertising revenue
|
|
$
|
375
|
|
|
$
|
366
|
|
|
$
|
1,358
|
|
|
$
|
1,264
|
|
Foreign exchange
effect on 2019 international advertising revenue using 2018
rates
|
|
(1)
|
|
|
|
|
26
|
|
|
|
International
advertising revenue excluding foreign exchange effect
|
|
$
|
374
|
|
|
|
|
$
|
1,384
|
|
|
|
International
advertising revenue year-over-year change percent
|
|
3
|
%
|
|
|
|
7
|
%
|
|
|
International
advertising revenue excluding foreign exchange effect
year-over-year change percent
|
|
2
|
%
|
|
|
|
9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
(1) Note the sum of advertising
revenue and data licensing and other revenue does not add up to
total revenue in the three months ended December 31, 2019 above due
to rounding.
|
View original
content:http://www.prnewswire.com/news-releases/twitter-announces-fourth-quarter-and-fiscal-year-2019-results-301000248.html
SOURCE Twitter, Inc.