SAN FRANCISCO, Oct. 26, 2021 /PRNewswire/ -- Twitter, Inc.
(NYSE: TWTR) today announced financial results for its third
quarter 2021.
"I am proud of our third quarter results. We're improving
personalization, facilitating conversation, delivering relevant
news, and finding new ways to help people get paid on Twitter,"
said Jack Dorsey, Twitter's CEO.
"Average monetizable DAU (mDAU) reached 211 million, up 13% year
over year in Q3, accelerating from 11% year over year growth in Q2,
driven by ongoing product improvements and global conversation
around current events."
"Our focus is paying off, and we are pleased with our
performance in the third quarter, with revenue up 37%
year-over-year, reflecting strength across all major products and
geographies," said Ned Segal,
Twitter's CFO. "We continued to drive increased value for our
advertisers thanks to revenue product innovation, including
progress on our brand and direct response offerings, strong sales
execution, and a broad increase in advertiser demand. These factors
contributed to 41% year-over-year growth in ad revenue in Q3."
Third Quarter 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.
- Q3 revenue totaled $1.28 billion,
an increase of 37% year over year.
-
- Advertising revenue totaled $1.14
billion, an increase of 41% year over year.
-
- Total ad engagements increased 6% year over year.
- Cost per engagement (CPE) increased 33% year over year.
- Data licensing and other revenue totaled $143 million, an increase of 12% year over
year.
- US revenue totaled $742 million,
an increase of 45% year over year.
- International revenue totaled $542
million, an increase of 28% year over year, or 27% on a
constant currency basis.
- Q3 operating loss of $743
million, or an operating margin of -58%, includes a one-time
litigation-related net charge of $766
million1, as well as ongoing
investments. Adjusted operating income, which excludes the one-time
litigation-related net charge, was $23
million reflecting an adjusted operating margin of 2%.
This compares to operating income of $56
million, representing an operating margin of 6% in the same
period of the previous year.
- Stock-based compensation (SBC) expense grew 42% year over year
to $164 million and was approximately
13% of total revenue.
- Q3 net loss was $537 million,
representing a net margin of -42% and diluted EPS of ($0.67). This compares to a net income of
$29 million, a net margin of 3%, and
diluted EPS of $0.04 in the same
period of the previous year.
- Net cash provided by operating activities in the quarter was
$389 million, compared to
$215 million in the same period last
year. Capital expenditures totaled $409
million, compared to $289
million in the same period last year, driven by
infrastructure investments in data center build-outs to support
audience growth and product innovation.
- Average monetizable daily active usage (mDAU) was 211 million
for Q3, compared to 187 million in the same period of the previous
year and 206 million in the previous quarter.
-
- Average US mDAU was 37 million for Q3, compared to 36 million
in the same period of the previous year and 37 million in the
previous quarter.
- Average international mDAU was 174 million for Q3, compared to
152 million in the same period of the previous year and 169 million
in the previous quarter.
1 Includes a charge of
$809.5 million to settle a shareholder class action lawsuit
partially offset by an insurance recovery of $5.8 million. In
addition, during the quarter we received insurance proceeds of
$38.0 million related to the settlement of separate earlier
shareholder derivative lawsuits.
|
Outlook
We continue to expect total revenue to grow faster than expenses
in 2021 (excluding the litigation settlement announced in Q3), and
we expect to continue our investment posture as we enter next year.
Our 30%+ headcount growth in 2021, with annual merit increases, and
other investments we made in 2021, including our new data center,
will flow into annual expenses for 2022, likely resulting in a
mid-20% increase in total expenses next year prior to hiring any
more people or making additional investments during 2022.
Before providing 2022 guidance in February, we wanted to share
some additional information regarding the sale of MoPub. The sale
is expected to close in Q1, and while the associated product,
engineering, and go-to-market teams are largely expected to shift
to direct response, SMB, and commerce upon closing, it will take
time for their work to deliver results. As a result, we do not
expect to recoup the total revenue loss associated with the sale of
MoPub in 2022, which is estimated to be between $200 and $250
million. Despite some expected 2022 revenue loss, there are
no changes to our goal of generating $7.5
billion or more of annual revenue in 2023 with an increased
focus and additional resources working on increasing our market
share within the ~$150 billion and
growing addressable market for ads on our website and apps.
Our outlook for Q4'21, which includes MoPub, is as follows:
- Total revenue is expected to be between $1.5 billion and $1.6
billion.
- GAAP operating income is expected to be between $130 million and $180
million.
- Capital expenditures are expected to be between $85 million and $135
million.
- Stock-based compensation expense is expected to be
approximately $175 million.
Note that our outlook for Q4 reflects foreign exchange rates as
of October 2021.
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
Third Quarter 2021 Webcast and Conference Call
Details
Twitter will host a conference call today,
Tuesday, October 26, 2021, at
3pm Pacific Time (6pm Eastern Time) to discuss financial results
for the third quarter 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
@jack, @nedsegal, @Twitter, and @TwitterIR as means of disclosing
material nonpublic information and for complying with its
disclosure obligations under Regulation FD.
Fourth Quarter Earnings Release Details
Twitter
expects to release financial results for the fourth quarter and
full year of 2021 on February 10,
2022, after market close. Twitter will host a conference
call on the same day to discuss these financial results at
3pm Pacific Time (6pm 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 or Twitter
applications that are able to show ads. Average mDAU for a period
represents the number of mDAU on each day of such period divided by
the number of days for such period. Changes in mDAU are a measure
of changes in the size of our daily logged in or otherwise
authenticated active total accounts. To calculate the
year-over-year change in mDAU, we subtract the average mDAU for the
three months ended in the previous year from the average mDAU for
the same three months ended in the current year and divide the
result by the average mDAU for the three months ended in the
previous year. Additionally, our calculation of mDAU is not based
on any standardized industry methodology and is not necessarily
calculated in the same manner or comparable to similarly titled
measures presented by other companies. Similarly, our measures of
mDAU growth and engagement may differ from estimates published by
third parties or from similarly titled metrics of our competitors
due to differences in methodology.
The numbers of mDAU presented in our earnings materials are
based on internal company data. While these numbers are based on
what we believe to be reasonable estimates for the applicable
period of measurement, there are inherent challenges in measuring
usage and engagement across our large number of total accounts
around the world. Furthermore, our metrics may be impacted by our
information quality efforts, which are our overall efforts to
reduce malicious activity on the service, inclusive of spam,
malicious automation, and fake accounts. For example, there are a
number of false or spam accounts in existence on our platform. We
have performed an internal review of a sample of accounts and
estimate that the average of false or spam accounts during the
third 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," "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 growth
opportunities and its outlook and guidance and assumptions
underlying such outlook and guidance; the impact of the COVID-19
pandemic and the timing of recovery from the pandemic on advertiser
demand across Twitter's platform and on Twitter's operating
results; the timing and impact of Twitter's proposed sale of MoPub,
including revenue impact, and Twitter's expectations regarding
future headcount growth and other costs and expenses, including its
SBC expenses. Twitter's expectations and beliefs regarding these
matters may not materialize, and actual results in future periods
are subject to risks and uncertainties, including changes in our
plans or assumptions, 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 or 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; Twitter experiences
expenses that exceed its expectations; and Twitter's expectations
regarding its divestiture do not materialize. 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 Twitter's
Quarterly Report on Form 10-Q for the fiscal quarter ended
June 30, 2021, each filed with the
Securities and Exchange Commission. Additional information will
also be set forth in Twitter's Quarterly Report on Form 10-Q for
the fiscal quarter ended September 30,
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, adjusted income (loss)
from operations, adjusted operating margin, non-GAAP income (loss)
before income taxes, non-GAAP provision for (benefit from) income
taxes, non-GAAP net income (loss), non-GAAP diluted net income
(loss) per share, adjusted EBITDA, non-GAAP costs and expenses,
adjusted net income (loss), adjusted diluted net income (loss) per
share, and adjusted free cash flow. In order to present revenues on
a constant currency basis for the fiscal quarter ended September 30, 2021, Twitter translated the
applicable measure using the prior year's monthly exchange rates
for its settlement currencies other than the US dollar. We have
presented adjusted income (loss) from operations solely to exclude
the one time net charge related to litigation in the three and nine
months ended September 30, 2021, and
no other adjustments were made in the calculation of this measure.
Adjusted operating margin is calculated by dividing adjusted
operating income (loss) by GAAP revenue. Twitter defines non-GAAP
income (loss) 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 non-recurring gain,
if any; Twitter defines non-GAAP provision for (benefit from)
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
non-recurring 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 the non-GAAP
diluted shares. When the convertible notes are dilutive, interest
expense, net of tax, is added back to non-GAAP net income to
calculate non-GAAP diluted net income per share. The non-GAAP
diluted shares are GAAP diluted shares plus the potential
additional common stock impact of the convertible senior notes that
were anti-dilutive for the GAAP diluted share calculation. 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 for (benefit
from) income taxes, restructuring charges, and one-time
non-recurring 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 non-recurring gain, if any. We
have presented adjusted net income (loss) solely to exclude the
income tax provision from the establishment of a valuation
allowance against the deferred tax assets in the nine months ended
September 30, 2020, and no other
adjustments were made in the calculation of this measure. Adjusted
diluted net income (loss) per share is calculated by dividing
adjusted net income (loss) by the GAAP diluted shares. When the
convertible notes are dilutive, interest expense, net of tax, is
added back to adjusted net income to calculate adjusted diluted net
income per share. 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,
adjusted income (loss) from operations, adjusted operating margin,
non-GAAP income (loss) before income taxes, non-GAAP provision for
(benefit from) income taxes, non-GAAP net income (loss), non-GAAP
diluted net income (loss) per share, adjusted EBITDA, non-GAAP
costs and expenses, adjusted net income (loss), and adjusted
diluted net income (loss) per share provide useful information
about its operating results, enhance the overall understanding of
Twitter's past performance and future prospects, and allow for
greater transparency with respect to key metrics used by Twitter's
management in its financial and operational decision-making.
Twitter uses these measures to establish budgets and operational
goals for managing its business and evaluating its performance.
Twitter believes that revenues on a constant currency basis is a
useful metric that facilitates comparison to its historical
performance. Twitter believes that adjusted income (loss) from
operations, adjusted operating margin, non-GAAP net income (loss),
non-GAAP diluted net income (loss) per share, adjusted EBITDA,
non-GAAP costs and expenses, adjusted net income (loss), and
adjusted diluted net income (loss) per share help identify
underlying trends in its business that could otherwise be masked by
expenses and one-time gains or charges, or the effects of the tax
provisions from the establishment of a valuation allowance against
deferred tax assets described above, which are non-operating
expenses.
Twitter is also presenting adjusted income (loss) from
operations and adjusted operating margin to better reflect
operating performance and improve comparability with past
periods.
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)
|
|
|
|
September 30,
2021
|
|
December 31,
2020
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
3,473,865
|
|
|
$
|
1,988,429
|
|
Short-term
investments
|
|
3,937,447
|
|
|
5,483,873
|
|
Accounts receivable,
net
|
|
1,014,208
|
|
|
1,041,743
|
|
Prepaid expenses and
other current assets
|
|
194,914
|
|
|
123,063
|
|
Assets held for
sale
|
|
28,800
|
|
|
—
|
|
Total current
assets
|
|
8,649,234
|
|
|
8,637,108
|
|
Property and
equipment, net
|
|
2,053,480
|
|
|
1,493,794
|
|
Operating lease
right-of-use assets
|
|
1,115,929
|
|
|
930,139
|
|
Intangible assets,
net
|
|
46,702
|
|
|
58,338
|
|
Goodwill
|
|
1,293,826
|
|
|
1,312,346
|
|
Deferred tax assets,
net
|
|
1,133,816
|
|
|
796,326
|
|
Other
assets
|
|
296,358
|
|
|
151,039
|
|
Total
assets
|
|
$
|
14,589,345
|
|
|
$
|
13,379,090
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
207,912
|
|
|
$
|
194,281
|
|
Accrued and other
current liabilities (1)
|
|
1,688,768
|
|
|
663,532
|
|
Convertible notes,
short-term
|
|
—
|
|
|
917,866
|
|
Operating lease
liabilities, short-term
|
|
218,301
|
|
|
177,147
|
|
Total current
liabilities
|
|
2,114,981
|
|
|
1,952,826
|
|
Convertible notes,
long-term
|
|
3,556,934
|
|
|
1,875,878
|
|
Senior notes,
long-term
|
|
693,744
|
|
|
692,994
|
|
Operating lease
liabilities, long-term
|
|
980,764
|
|
|
819,748
|
|
Deferred and other
long-term tax liabilities, net
|
|
40,009
|
|
|
31,463
|
|
Other long-term
liabilities
|
|
30,282
|
|
|
36,099
|
|
Total
liabilities
|
|
7,416,714
|
|
|
5,409,008
|
|
Stockholders'
equity:
|
|
|
|
|
Common
stock
|
|
4
|
|
|
4
|
|
Additional paid-in
capital
|
|
8,468,708
|
|
|
9,167,138
|
|
Treasury
stock
|
|
(5,291)
|
|
|
(5,297)
|
|
Accumulated other
comprehensive loss
|
|
(106,794)
|
|
|
(66,094)
|
|
Accumulated
deficit
|
|
(1,183,996)
|
|
|
(1,125,669)
|
|
Total stockholders'
equity
|
|
7,172,631
|
|
|
7,970,082
|
|
Total liabilities and
stockholders' equity
|
|
$
|
14,589,345
|
|
|
$
|
13,379,090
|
|
|
|
|
|
|
(1) In the third quarter of 2021, we
entered into an agreement to settle a shareholder class action
lawsuit and recorded an accrual of $809.5 million, which is
included in
accrued and other current liabilities on the consolidated balance
sheet as of September 30, 2021.
|
TWITTER,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In thousands,
except per share data)
|
(Unaudited)
|
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Revenue
|
|
$
|
1,283,817
|
|
|
$
|
936,233
|
|
|
$
|
3,510,262
|
|
|
$
|
2,427,308
|
|
Costs and
expenses
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
484,479
|
|
|
361,388
|
|
|
1,282,419
|
|
|
933,464
|
|
Research and
development
|
|
324,252
|
|
|
208,877
|
|
|
874,820
|
|
|
625,071
|
|
Sales and
marketing
|
|
301,078
|
|
|
215,285
|
|
|
837,572
|
|
|
643,858
|
|
General and
administrative (1)
|
|
150,855
|
|
|
94,576
|
|
|
409,864
|
|
|
450,181
|
|
Litigation settlement,
net (2)
|
|
765,701
|
|
|
—
|
|
|
765,701
|
|
|
—
|
|
Total costs and
expenses
|
|
2,026,365
|
|
|
880,126
|
|
|
4,170,376
|
|
|
2,652,574
|
|
Income (loss) from
operations
|
|
(742,548)
|
|
|
56,107
|
|
|
(660,114)
|
|
|
(225,266)
|
|
Interest
expense
|
|
(13,284)
|
|
|
(39,614)
|
|
|
(40,362)
|
|
|
(112,712)
|
|
Interest
income
|
|
8,125
|
|
|
17,167
|
|
|
28,328
|
|
|
75,077
|
|
Other income
(expense), net
|
|
20,625
|
|
|
(3,977)
|
|
|
76,370
|
|
|
(12,057)
|
|
Income (loss) before
income taxes
|
|
(727,082)
|
|
|
29,683
|
|
|
(595,778)
|
|
|
(274,958)
|
|
Provision (benefit)
for income taxes
|
|
(190,325)
|
|
|
1,024
|
|
|
(192,675)
|
|
|
1,082,784
|
|
Net income
(loss)
|
|
$
|
(536,757)
|
|
|
$
|
28,659
|
|
|
$
|
(403,103)
|
|
|
$
|
(1,357,742)
|
|
Net income (loss) per
share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.67)
|
|
|
$
|
0.04
|
|
|
$
|
(0.51)
|
|
|
$
|
(1.73)
|
|
Diluted
|
|
$
|
(0.67)
|
|
|
$
|
0.04
|
|
|
$
|
(0.51)
|
|
|
$
|
(1.73)
|
|
Weighted-average
shares used to compute net income (loss)
per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
797,985
|
|
|
790,827
|
|
|
796,775
|
|
|
785,788
|
|
Diluted
|
|
797,985
|
|
|
806,383
|
|
|
796,775
|
|
|
785,788
|
|
|
|
|
|
|
|
|
|
|
(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 an
insurance recovery of $5.8 million. In addition, during the quarter
we received insurance proceeds of $38.0 million related to the
settlement of separate earlier
shareholder derivative lawsuits.
|
TWITTER,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In
thousands)
|
(Unaudited)
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Cash flows from
operating activities
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
(536,757)
|
|
|
$
|
28,659
|
|
|
$
|
(403,103)
|
|
|
$
|
(1,357,742)
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization expense
|
|
133,448
|
|
|
121,983
|
|
|
399,312
|
|
|
366,469
|
|
Stock-based
compensation expense
|
|
164,295
|
|
|
115,969
|
|
|
453,370
|
|
|
346,748
|
|
Amortization of
discount on convertible notes
|
|
—
|
|
|
26,673
|
|
|
—
|
|
|
74,733
|
|
Bad debt
expense
|
|
2,043
|
|
|
(634)
|
|
|
2,434
|
|
|
16,861
|
|
Deferred income
taxes
|
|
(199,772)
|
|
|
(6,345)
|
|
|
(222,789)
|
|
|
(32,382)
|
|
Deferred tax assets
valuation allowance establishment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,101,374
|
|
Impairment (gain) on
investments in privately-held companies
|
|
(24,900)
|
|
|
339
|
|
|
(76,794)
|
|
|
8,842
|
|
Other
adjustments
|
|
54
|
|
|
(2,571)
|
|
|
1,521
|
|
|
(7,756)
|
|
Changes in assets and
liabilities, net of assets acquired and liabilities assumed
from acquisitions:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
(69,139)
|
|
|
(136,469)
|
|
|
19,830
|
|
|
97,812
|
|
Prepaid expenses and
other assets
|
|
(33,874)
|
|
|
(27,722)
|
|
|
(78,394)
|
|
|
(24,765)
|
|
Operating lease
right-of-use assets
|
|
55,842
|
|
|
43,595
|
|
|
159,891
|
|
|
121,712
|
|
Accounts
payable
|
|
17,883
|
|
|
20,512
|
|
|
20,701
|
|
|
(5,722)
|
|
Accrued and other
liabilities
|
|
929,848
|
|
|
71,922
|
|
|
1,029,091
|
|
|
76,497
|
|
Operating lease
liabilities
|
|
(49,991)
|
|
|
(41,124)
|
|
|
(143,939)
|
|
|
(120,111)
|
|
Net cash provided by
operating activities
|
|
388,980
|
|
|
214,787
|
|
|
1,161,131
|
|
|
662,570
|
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
(411,227)
|
|
|
(290,746)
|
|
|
(871,603)
|
|
|
(577,829)
|
|
Proceeds from sales of
property and equipment
|
|
2,076
|
|
|
1,910
|
|
|
6,913
|
|
|
5,815
|
|
Purchases of
marketable securities
|
|
(619,318)
|
|
|
(1,981,219)
|
|
|
(2,785,014)
|
|
|
(5,103,983)
|
|
Proceeds from
maturities of marketable securities
|
|
1,103,717
|
|
|
1,085,761
|
|
|
3,188,254
|
|
|
3,566,895
|
|
Proceeds from sales of
marketable securities
|
|
48,820
|
|
|
66,718
|
|
|
1,141,614
|
|
|
925,387
|
|
Purchases of
investments in privately-held companies
|
|
(1,692)
|
|
|
(2,500)
|
|
|
(33,189)
|
|
|
(3,839)
|
|
Investments in Finance
Justice Fund
|
|
(29,300)
|
|
|
—
|
|
|
(52,000)
|
|
|
—
|
|
Business combinations,
net of cash acquired
|
|
—
|
|
|
—
|
|
|
(22,937)
|
|
|
(34,285)
|
|
Other investing
activities
|
|
—
|
|
|
—
|
|
|
(8,385)
|
|
|
(11,050)
|
|
Net cash provided by
(used in) investing activities
|
|
93,076
|
|
|
(1,120,076)
|
|
|
563,653
|
|
|
(1,232,889)
|
|
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)
|
|
|
—
|
|
|
(954,000)
|
|
|
—
|
|
Repurchases of common
stock
|
|
(169,457)
|
|
|
—
|
|
|
(664,821)
|
|
|
—
|
|
Taxes paid related to
net share settlement of equity awards
|
|
(6,215)
|
|
|
(3,726)
|
|
|
(21,712)
|
|
|
(18,344)
|
|
Payments of finance
lease obligations
|
|
—
|
|
|
(4,117)
|
|
|
(565)
|
|
|
(20,573)
|
|
Proceeds from exercise
of stock options
|
|
51
|
|
|
31
|
|
|
2,037
|
|
|
454
|
|
Proceeds from
issuances of common stock under employee stock purchase
plan
|
|
—
|
|
|
—
|
|
|
39,531
|
|
|
34,395
|
|
Net cash provided by
(used in) financing activities
|
|
(1,129,621)
|
|
|
(7,812)
|
|
|
(231,124)
|
|
|
981,270
|
|
Net increase
(decrease) in cash, cash equivalents and restricted cash
|
|
(647,565)
|
|
|
(913,101)
|
|
|
1,493,660
|
|
|
410,951
|
|
Foreign exchange
effect on cash, cash equivalents and restricted cash
|
|
(4,392)
|
|
|
924
|
|
|
(8,391)
|
|
|
(14,854)
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
|
4,148,502
|
|
|
3,135,940
|
|
|
2,011,276
|
|
|
1,827,666
|
|
Cash, cash
equivalents and restricted cash at end of period
|
|
$
|
3,496,545
|
|
|
$
|
2,223,763
|
|
|
$
|
3,496,545
|
|
|
$
|
2,223,763
|
|
Supplemental
disclosures of non-cash investing and financing
activities
|
|
|
|
|
|
|
|
|
Common stock issued in
connection with acquisitions
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,312
|
|
Changes in accrued
property and equipment purchases
|
|
$
|
(144,550)
|
|
|
$
|
63,400
|
|
|
$
|
(6,293)
|
|
|
$
|
103,649
|
|
Reconciliation of
cash, cash equivalents and restricted cash as shown in the
consolidated statements of cash flows
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
3,473,865
|
|
|
$
|
2,201,073
|
|
|
$
|
3,473,865
|
|
|
$
|
2,201,073
|
|
Restricted cash
included in prepaid expenses and other current assets
|
|
3,156
|
|
|
2,251
|
|
|
3,156
|
|
|
2,251
|
|
Restricted cash
included in other assets
|
|
19,524
|
|
|
20,439
|
|
|
19,524
|
|
|
20,439
|
|
Total cash, cash
equivalents and restricted cash
|
|
$
|
3,496,545
|
|
|
$
|
2,223,763
|
|
|
$
|
3,496,545
|
|
|
$
|
2,223,763
|
|
TWITTER,
INC.
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES
|
(In thousands,
except per share data)
|
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Non-GAAP net
income (loss):
|
|
|
|
|
|
|
|
|
Net income (loss)
(1) (2)
|
|
$
|
(536,757)
|
|
|
$
|
28,659
|
|
|
$
|
(403,103)
|
|
|
$
|
(1,357,742)
|
|
Exclude: Provision
(benefit) for income taxes
|
|
(190,325)
|
|
|
1,024
|
|
|
(192,675)
|
|
|
1,082,784
|
|
Income (loss) before
income taxes
|
|
(727,082)
|
|
|
29,683
|
|
|
(595,778)
|
|
|
(274,958)
|
|
Exclude:
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense
|
|
164,295
|
|
|
115,969
|
|
|
453,370
|
|
|
346,748
|
|
Amortization of
acquired intangible assets
|
|
10,808
|
|
|
5,424
|
|
|
30,647
|
|
|
17,984
|
|
Non-cash interest
expense related to convertible notes (3)
|
|
—
|
|
|
26,673
|
|
|
—
|
|
|
74,733
|
|
Impairment (gain) on
investments in privately-held companies
|
|
(24,900)
|
|
|
339
|
|
|
(76,794)
|
|
|
8,842
|
|
Non-GAAP income (loss)
before income taxes
|
|
(576,879)
|
|
|
178,088
|
|
|
(188,555)
|
|
|
173,349
|
|
Non-GAAP provision
(benefit) for income taxes (4)
|
|
(142,461)
|
|
|
26,713
|
|
|
(69,867)
|
|
|
1,174,944
|
|
Non-GAAP net income
(loss)
|
|
$
|
(434,418)
|
|
|
$
|
151,375
|
|
|
$
|
(118,688)
|
|
|
$
|
(1,001,595)
|
|
Non-GAAP diluted
net income (loss) per share:
|
|
|
|
|
|
|
|
|
Non-GAAP net income
(loss)
|
|
$
|
(434,418)
|
|
|
$
|
151,375
|
|
|
$
|
(118,688)
|
|
|
$
|
(1,001,595)
|
|
GAAP basic
shares
|
|
797,985
|
|
|
790,827
|
|
|
796,775
|
|
|
785,788
|
|
Dilutive securities
(5)
|
|
—
|
|
|
15,556
|
|
|
—
|
|
|
—
|
|
Non-GAAP diluted
shares (6)
|
|
797,985
|
|
|
806,383
|
|
|
796,775
|
|
|
785,788
|
|
Non-GAAP diluted net
income (loss) per share
|
|
$
|
(0.54)
|
|
|
$
|
0.19
|
|
|
$
|
(0.15)
|
|
|
$
|
(1.27)
|
|
Adjusted
EBITDA:
|
|
|
|
|
|
|
|
|
Net income (loss)
(1) (2)
|
|
$
|
(536,757)
|
|
|
$
|
28,659
|
|
|
$
|
(403,103)
|
|
|
$
|
(1,357,742)
|
|
Exclude:
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense
|
|
164,295
|
|
|
115,969
|
|
|
453,370
|
|
|
346,748
|
|
Depreciation and
amortization expense
|
|
133,448
|
|
|
121,983
|
|
|
399,312
|
|
|
366,469
|
|
Interest and other
expense (income), net
|
|
(15,466)
|
|
|
26,424
|
|
|
(64,336)
|
|
|
49,692
|
|
Provision (benefit)
for income taxes
|
|
(190,325)
|
|
|
1,024
|
|
|
(192,675)
|
|
|
1,082,784
|
|
Adjusted
EBITDA
|
|
$
|
(444,805)
|
|
|
$
|
294,059
|
|
|
$
|
192,568
|
|
|
$
|
487,951
|
|
Stock-based
compensation expense by function:
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
$
|
11,627
|
|
|
$
|
8,581
|
|
|
$
|
33,479
|
|
|
$
|
23,333
|
|
Research and
development
|
|
101,515
|
|
|
66,111
|
|
|
269,983
|
|
|
204,686
|
|
Sales and
marketing
|
|
27,105
|
|
|
25,550
|
|
|
84,647
|
|
|
73,572
|
|
General and
administrative
|
|
24,048
|
|
|
15,727
|
|
|
65,261
|
|
|
45,157
|
|
Total stock-based
compensation expense
|
|
$
|
164,295
|
|
|
$
|
115,969
|
|
|
$
|
453,370
|
|
|
$
|
346,748
|
|
Amortization of
acquired intangible assets by function:
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
$
|
7,587
|
|
|
$
|
5,424
|
|
|
$
|
21,059
|
|
|
$
|
17,984
|
|
Research and
development
|
|
3,071
|
|
|
—
|
|
|
9,188
|
|
|
—
|
|
Sales and
marketing
|
|
150
|
|
|
—
|
|
|
400
|
|
|
—
|
|
Total amortization of
acquired intangible assets
|
|
$
|
10,808
|
|
|
$
|
5,424
|
|
|
$
|
30,647
|
|
|
$
|
17,984
|
|
Non-GAAP costs and
expenses:
|
|
|
|
|
|
|
|
|
Total costs and
expenses
|
|
$
|
2,026,365
|
|
|
$
|
880,126
|
|
|
$
|
4,170,376
|
|
|
$
|
2,652,574
|
|
Exclude:
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense
|
|
(164,295)
|
|
|
(115,969)
|
|
|
(453,370)
|
|
|
(346,748)
|
|
Amortization of
acquired intangible assets
|
|
(10,808)
|
|
|
(5,424)
|
|
|
(30,647)
|
|
|
(17,984)
|
|
Total non-GAAP costs
and expenses
|
|
$
|
1,851,262
|
|
|
$
|
758,733
|
|
|
$
|
3,686,359
|
|
|
$
|
2,287,842
|
|
TWITTER,
INC.
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES
|
(In thousands,
except per share data)
|
(Unaudited)
|
(Continued)
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Adjusted free cash
flow:
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
|
388,980
|
|
|
$
|
214,787
|
|
|
$
|
1,161,131
|
|
|
$
|
662,570
|
|
Less: purchases of
property and equipment
|
|
(411,227)
|
|
|
(290,746)
|
|
|
(871,603)
|
|
|
(577,829)
|
|
Plus: proceeds from
sales of property and equipment
|
|
2,076
|
|
|
1,910
|
|
|
6,913
|
|
|
5,815
|
|
Adjusted free cash
flow
|
|
$
|
(20,171)
|
|
|
$
|
(74,049)
|
|
|
$
|
296,441
|
|
|
$
|
90,556
|
|
Adjusted income
(loss) from operations:
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
|
(742,548)
|
|
|
56,107
|
|
|
(660,114)
|
|
|
(225,266)
|
|
Exclude: litigation
settlement, net (1)
|
|
765,701
|
|
|
—
|
|
|
765,701
|
|
|
—
|
|
Adjusted income
(loss) from operations
|
|
$
|
23,153
|
|
|
$
|
56,107
|
|
|
$
|
105,587
|
|
|
$
|
(225,266)
|
|
Adjusted net
income (loss):
|
|
|
|
|
|
|
|
|
Net income (loss)
(1) (2)
|
|
$
|
(536,757)
|
|
|
$
|
28,659
|
|
|
$
|
(403,103)
|
|
|
$
|
(1,357,742)
|
|
Exclude: provision for
deferred tax assets valuation allowance (7)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,101,374
|
|
Adjusted net income
(loss)
|
|
$
|
(536,757)
|
|
|
$
|
28,659
|
|
|
$
|
(403,103)
|
|
|
$
|
(256,368)
|
|
Adjusted diluted
net income (loss) per share:
|
|
|
|
|
|
|
|
|
Adjusted net income
(loss)
|
|
$
|
(536,757)
|
|
|
$
|
28,659
|
|
|
$
|
(403,103)
|
|
|
$
|
(256,368)
|
|
GAAP diluted
shares
|
|
797,985
|
|
|
806,383
|
|
|
796,775
|
|
|
785,788
|
|
Adjusted diluted net
income (loss) per share
|
|
$
|
(0.67)
|
|
|
$
|
0.04
|
|
|
$
|
(0.51)
|
|
|
$
|
(0.33)
|
|
|
|
|
|
|
|
|
|
|
(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 an insurance recovery of $5.8 million. In addition, during the
quarter we received insurance proceeds of $38.0 million related to
the settlement of separate
earlier 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 nine months ended
September 30, 2020 includes a provision for income taxes of $1.11
billion related to the
establishment of a valuation allowance against deferred tax
assets.
|
(5) 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 three and nine months ended September 30, 2021
and in the nine months ended September 30, 2020 due to the GAAP net
loss position in
those periods. There is no dilutive effect of the notes or the
related hedge and warrant transactions in the three months ended
September 30, 2020.
|
(6) GAAP diluted shares are the same
as non-GAAP diluted shares for all periods presented.
|
(7) The
provision for deferred tax assets valuation allowance in the nine
months ended September 30, 2020 is related to the establishment of
a valuation
allowance against deferred tax assets.
|
TWITTER,
INC.
|
RECONCILIATION OF
GAAP REVENUE TO NON-GAAP CONSTANT CURRENCY REVENUE
|
(In
millions)
|
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Revenue,
advertising revenue, data licensing and other revenue,
international revenue and
international advertising revenue excluding foreign exchange effect
(1):
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
1,284
|
|
|
$
|
936
|
|
|
$
|
3,510
|
|
|
$
|
2,427
|
|
Foreign exchange
effect on 2021 revenue using 2020 rates
|
|
(2)
|
|
|
|
|
(28)
|
|
|
|
Revenue excluding
foreign exchange effect
|
|
$
|
1,282
|
|
|
|
|
$
|
3,482
|
|
|
|
Revenue
year-over-year change percent
|
|
37
|
%
|
|
|
|
45
|
%
|
|
|
Revenue excluding
foreign exchange effect year-over-year change percent
|
|
37
|
%
|
|
|
|
43
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Advertising
revenue
|
|
$
|
1,141
|
|
|
$
|
808
|
|
|
$
|
3,093
|
|
|
$
|
2,053
|
|
Foreign exchange
effect on 2021 advertising revenue using 2020 rates
|
|
(2)
|
|
|
|
|
(28)
|
|
|
|
Advertising revenue
excluding foreign exchange effect
|
|
$
|
1,139
|
|
|
|
|
$
|
3,065
|
|
|
|
Advertising revenue
year-over-year change percent
|
|
41
|
%
|
|
|
|
51
|
%
|
|
|
Advertising revenue
excluding foreign exchange effect year-over-year change
percent
|
|
41
|
%
|
|
|
|
49
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Data licensing and
other revenue
|
|
$
|
143
|
|
|
$
|
128
|
|
|
$
|
418
|
|
|
$
|
375
|
|
Foreign exchange
effect on 2021 data licensing and other revenue using 2020
rates
|
|
—
|
|
|
|
|
—
|
|
|
|
Data licensing and
other revenue excluding foreign exchange effect
|
|
$
|
143
|
|
|
|
|
$
|
418
|
|
|
|
Data licensing and
other revenue year-over-year change percent
|
|
12
|
%
|
|
|
|
11
|
%
|
|
|
Data licensing and
other revenue excluding foreign exchange effect year-over-year
change percent
|
|
12
|
%
|
|
|
|
11
|
%
|
|
|
|
|
|
|
|
|
|
|
|
International
revenue
|
|
$
|
542
|
|
|
$
|
424
|
|
|
$
|
1,559
|
|
|
$
|
1,081
|
|
Foreign exchange
effect on 2021 international revenue using 2020 rates
|
|
(2)
|
|
|
|
|
(28)
|
|
|
|
International revenue
excluding foreign exchange effect
|
|
$
|
540
|
|
|
|
|
$
|
1,531
|
|
|
|
International revenue
year-over-year change percent
|
|
28
|
%
|
|
|
|
44
|
%
|
|
|
International revenue
excluding foreign exchange effect year-over-year change
percent
|
|
27
|
%
|
|
|
|
42
|
%
|
|
|
|
|
|
|
|
|
|
|
|
International
advertising revenue
|
|
$
|
493
|
|
|
$
|
381
|
|
|
$
|
1,419
|
|
|
$
|
960
|
|
Foreign exchange
effect on 2021 international advertising revenue using 2020
rates
|
|
(2)
|
|
|
|
|
(28)
|
|
|
|
International
advertising revenue excluding foreign exchange effect
|
|
$
|
491
|
|
|
|
|
$
|
1,391
|
|
|
|
International
advertising revenue year-over-year change percent
|
|
30
|
%
|
|
|
|
48
|
%
|
|
|
International
advertising revenue excluding foreign exchange effect
year-over-year change percent
|
|
29
|
%
|
|
|
|
45
|
%
|
|
|
|
|
|
|
|
|
|
|
|
(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-third-quarter-2021-results-301409024.html
SOURCE Twitter, Inc.