SAN FRANCISCO, April 25, 2018 /PRNewswire/ -- Twitter, Inc.
(NYSE: TWTR) today announced financial results for its first
quarter 2018.
"The first quarter was a strong start to the year," said
Jack Dorsey, Twitter CEO. "We grew
our audience and engagement, marking another quarter of double
digit year-over-year DAU growth, and continued our work to make it
easier to follow topics, interests, and events on Twitter. We also
introduced a new framework to think more cohesively about the
issues affecting our service, including information quality and
safety. This holistic approach will help us more effectively
address these challenges by viewing them through the broader lens
of the health of the public conversation, and we're encouraged by
our initial progress in this area."
"We're pleased to report growth across all major products and
geographies in the first quarter," said Ned
Segal, Twitter CFO. "We grew total revenue 21%
year-over-year and owned-and-operated advertising revenue 28%
year-over-year, driven by continued audience growth, differentiated
ad product features, improved ROI, and better sales execution. Our
strong revenue performance drove better than expected profits and
GAAP net margins of 9%, reflecting our continued prioritization and
disciplined execution across our strategic priorities."
First Quarter 2018 Operational and Financial
Highlights
The company reported first quarter revenue of $665 million, an increase of 21% year-over-year.
Quarterly GAAP net income was $61
million, representing a GAAP net margin of 9% and GAAP
diluted EPS of $0.08. This compares
with a quarterly GAAP net loss of $62
million, a GAAP net margin of (11%) and GAAP diluted EPS of
($0.09) for the same period last
year.
Quarterly non-GAAP net income was $123
million, representing a non-GAAP diluted EPS of $0.16. This compares with a quarterly non-GAAP
net income of $53 million,
representing a non-GAAP diluted EPS of $0.07 for the same period last year. As a result
of the 2017 Tax Cuts and Jobs Act, the blended US federal and state
statutory tax rate used to calculate the company's reported
non-GAAP provisions for income taxes decreased from 37% to 24%
beginning in Q1 2018. Approximately $21
million of the $70 million
year-over-year increase in non-GAAP net income resulted from this
change.
Adjusted EBITDA was $244 million
or 37% of total revenue, compared to $170
million or 31% of total revenue for the same period last
year.
Average monthly active users (MAUs) were 336 million for the
quarter, an increase of 3% year-over-year and an increase of 6
million compared to 330 million in the previous quarter. Average
daily active users (DAU) grew 10% year-over-year, marking another
quarter of double-digit growth.
Outlook
For Q2, we expect:
- Adjusted EBITDA to be between $245
million and $265 million
- Adjusted EBITDA margin to be between 37% and 38%
- Stock-based compensation expense to be in the range of
$85 million to $95 million
For FY 2018, we expect:
- Stock-based compensation expense to be in the range of
$350 million to $450 million
- Capital expenditures to be between $375
million and $450 million
Note that our outlook for Q2 and the full year 2018 reflects
foreign exchange rates as of April 16,
2018.
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.
Guidance for adjusted EBITDA and adjusted EBITDA margin excludes
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. We have not reconciled adjusted EBITDA guidance to projected
GAAP net income (loss) because we do not provide guidance on GAAP
net income (loss) or the reconciling items between adjusted EBITDA
and GAAP net income (loss), other than stock-based compensation
expense, as a result of the uncertainty regarding, and the
potential variability of, certain of these items. Accordingly, a
reconciliation of the non-GAAP financial measure guidance to the
corresponding GAAP measure is not available without unreasonable
effort.
Twitter's complete first quarter 2018 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
25, 2018, at 5:00 a.m. Pacific
Time (8:00 a.m. Eastern Time)
to discuss financial results for the first quarter of 2018. 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.
Twitter will release financial results for the second quarter of
2018 on July 27, 2018, before the
market opens at approximately 4:00 a.m.
Pacific Time (7:00 a.m. Eastern
Time). On the same day, Twitter will host a conference call
to discuss those financial results at 5:00
a.m. Pacific Time (8:00 a.m. 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.
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 forwardlooking 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, priorities, product and business plans, including
strategies to improve the health of the platform. 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, 2017
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,
2018. 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
thirdparty 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 usage or users (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 DAUs for a period represent the average of the
DAUs at the end of such period.
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 income
before income taxes, non-GAAP provision for income taxes, adjusted
EBITDA margin, and non-GAAP diluted EPS. 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, and restructuring charges and one-time nonrecurring gain;
and Twitter defines non-GAAP net income 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 of investments in privately-held companies,
restructuring charges and one-time nonrecurring gain, and
adjustment to income tax expense based on the non-GAAP measure of
profitability using Twitter's blended US federal and state
statutory tax rate. 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 of
investments in privately held companies, restructuring charges, and
one-time nonrecurring gain; and Twitter defines non-GAAP provision
for income taxes as the current and deferred income tax expense
commensurate with the non-GAAP measure of profitability using
Twitter's blended US federal and state statutory tax rate. 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. 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 income before income taxes, non-GAAP
provision for income taxes, 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, 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 and onetime gains or charges that it excludes in adjusted
EBITDA, non-GAAP net income, adjusted EBITDA margin and non-GAAP
diluted EPS. Twitter also believes that adjusted EBITDA, non-GAAP
net income, 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.
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
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|
|
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Investors:
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Press:
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Cherryl
Valenzuela
|
Kristin
Binns
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ir@twitter.com
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press@twitter.com
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TWITTER, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(Unaudited)
|
|
|
|
Three Months
Ended
March 31,
|
|
2018
|
|
2017
|
|
|
|
|
|
|
Non-GAAP net
income and net income per share:
|
|
|
|
|
|
Net income
(loss)
|
$
|
60,997
|
|
$
|
(61,559)
|
Exclude: Provision
for income
taxes
|
|
2,885
|
|
|
3,194
|
Income (loss) before
income taxes
|
|
63,882
|
|
|
(58,365)
|
Stock-based
compensation expense
|
|
73,266
|
|
|
116,997
|
Amortization
of acquired intangible assets
|
|
4,942
|
|
|
16,191
|
Non-cash
interest expense related to convertible notes
|
|
20,722
|
|
|
19,248
|
Restructuring
charges and one-time nonrecurring gain
|
|
(983)
|
|
|
(9,572)
|
Non-GAAP income before
income taxes
|
|
161,829
|
|
|
84,499
|
Non-GAAP provision for
income taxes (1)
|
|
38,839
|
|
|
31,265
|
Non-GAAP net
income
|
$
|
122,990
|
|
$
|
53,234
|
GAAP basic
shares
|
|
747,697
|
|
|
722,048
|
Dilutive
equity awards (2)
|
|
18,164
|
|
|
8,675
|
Non-GAAP diluted
shares (3)
|
|
765,861
|
|
|
730,723
|
Non-GAAP diluted net
income per share
|
$
|
0.16
|
|
$
|
0.07
|
Adjusted
EBITDA:
|
|
|
|
|
|
Net income
(loss)
|
$
|
60,997
|
|
$
|
(61,559)
|
Stock-based
compensation expense
|
|
73,266
|
|
|
116,997
|
Depreciation
and amortization expense
|
|
96,846
|
|
|
102,792
|
Interest
and other expense, net
|
|
11,043
|
|
|
18,087
|
Provision
for income taxes
|
|
2,885
|
|
|
3,194
|
Restructuring
charges and one-time nonrecurring gain
|
|
(983)
|
|
|
(9,572)
|
Adjusted
EBITDA
|
$
|
244,054
|
|
$
|
169,939
|
|
|
|
|
|
|
(1) As a
result of the 2017 Tax Cuts and Jobs Act, the blended US federal
and state statutory tax rate used to calculate our reported
non-GAAP provisions for income taxes decreased from 37% to 24%
beginning in the first quarter of 2018.
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|
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(2) Gives
effect to potential common stock instruments such as stock options,
RSUs, shares to be issued under ESPP, unvested restricted stocks
and warrants. There is no dilutive effect of the notes nor the
related hedge and warrant transactions.
|
|
|
(3) GAAP
dilutive shares are the same as Non-GAAP dilutive shares for the
three months ended March 31, 2018.
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SOURCE Twitter, Inc.