SAN FRANCISCO, July 22, 2021 /PRNewswire/ -- Twitter, Inc.
(NYSE: TWTR) today announced financial results for its second
quarter 2021.
"As we enter the second half of 2021, we are shipping more,
learning faster, and hiring remarkable talent," said Jack Dorsey, Twitter's CEO. "For example, our
increased shipping cadence contributed to reaching 206 million
average monetizable DAU (mDAU) in Q2, up 11% year over year and 3%
quarter over quarter. There's a tremendous opportunity to get the
whole world to use Twitter."
"We delivered better-than-expected performance across all major
products and geographies while growing our audience," said
Ned Segal, Twitter's CFO. "We
continued to make significant progress on our direct response and
brand products with updated ad formats, improved measurement, and
better prediction. We are driving more value for advertisers with
our strong push into performance-based advertising and expanded
offerings for small and medium-sized businesses."
Second 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.
- Q2 revenue totaled $1.19 billion,
an increase of 74% year over year.
-
- Advertising revenue totaled $1.05
billion, an increase of 87% year over year, or 85% on a
constant currency basis.
-
- Total ad engagements increased 32% year over year.
- Cost per engagement (CPE) increased 42% year over year.
- Data licensing and other revenue totaled $137 million, an increase of 13% year over
year.
- US revenue totaled $653 million,
an increase of 79% year over year.
- International revenue totaled $537
million, an increase of 69% year over year, or 64% on a
constant currency basis.
- Q2 costs and expenses totaled $1.16
billion, an increase of 21% year over year. This resulted in
operating income of $30 million and
3% operating margin, compared to an operating loss of $274 million, or -40% operating margin for the
same period in 2020. The year ago period includes a
non-recurring expense of $150 million
related to an ongoing FTC matter.
- Stock-based compensation (SBC) expense grew 34% year over year
to $178 million and was approximately
15% of total revenue.
- Q2 net income was $66 million,
representing a net margin of 6% and diluted EPS of $0.08. This compares to a net loss of
$1.38 billion, a net margin of -202%,
and diluted EPS of ($1.75) in the
same period of the previous year. Excluding the impact of the
income tax expense due to the establishment of a valuation
allowance driven primarily by COVID-19, Q2 2020 adjusted net loss
was $277 million, representing an
adjusted net margin of -40% and adjusted diluted EPS of
($0.35).
- Net cash provided by operating activities in the quarter was
$382 million, compared to
$201 million in the same period last
year. Capital expenditures totaled $276
million, compared to $162
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 users (mDAU) were 206 million
for Q2, compared to 186 million in the same period of the previous
year and compared to 199 million in the previous quarter.
-
- Average US mDAU were 37 million for Q2, compared to 36 million
in the same period of the previous year and 38 million in the
previous quarter.
- Average international mDAU were 169 million for Q2, compared to
150 million in the same period of the previous year and 162 million
in the previous quarter.
Outlook
Given our execution and confidence in our strategy as we enter
the second half of the year, we're updating our outlook for expense
growth and revenue. We now expect headcount, along with total costs
and expenses, to grow 30% or more for the full year of 2021 with a
focus on engineering and product. As you'd expect, incremental
headcount investments in 2021 will flow into our annual expense
base in 2022. We continue to expect total revenue to grow faster
than expenses in 2021 — assuming the global pandemic continues to
improve and that we continue to see modest impact from the rollout
of changes associated with iOS 14.5. How much faster will depend on
various factors, including our execution on our direct response
roadmap and macroeconomic factors.
For Q3'21:
- Total revenue is expected to be between $1.22 billion and $1.3
billion.
- GAAP operating income is expected to be between a loss of
$50 million and break even.
For FY21:
- Stock-based compensation expense is expected to be
approximately $600 million.
- Capital expenditures are expected to be between $900 million and $950
million.
Note that our outlook for Q3 and the full year 2021 reflects
foreign exchange rates as of July
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
Second Quarter 2021 Webcast and Conference Call
Details
Twitter will host a conference call today,
Thursday, July 22, 2021, at
3pm Pacific Time (6pm Eastern Time) to discuss financial results
for the second 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.
Third Quarter Earnings Release Details
Twitter expects
to release financial results for the third quarter of 2021 on
October 26, 2021, 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, visitabout.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
second 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 Twitter's
operations and personnel, on commercial activity and advertiser
demand across Twitter's platform, and on Twitter's operating
results, as well as on worldwide and regional economies; the impact
of the rollout of iOS 14.5 on Twitter's business and operating
results; 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; and Twitter experiences expenses that exceed its
expectations. The forward-looking statements contained in this
press release are also subject to other risks and uncertainties,
including those more fully described in Twitter's Annual Report on
Form 10-K for the fiscal year ended December
31, 2020, and Twitter's Quarterly Report on Form 10-Q for
the fiscal quarter ended March 31,
2021, 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
June 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, 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 net margin, 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 June 30, 2021, Twitter
translated the applicable measure using the prior year's monthly
exchange rates for its settlement currencies other than the US
dollar. Twitter defines non-GAAP income (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 three and six
months ended June 30, 2020, and no
other adjustments were made in the calculation of this measure.
Adjusted net margin is calculated by dividing adjusted net income
(loss) by GAAP revenue. 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,
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 net
margin, 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 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
net margin, 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.
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)
|
|
|
|
June 30,
2021
|
|
December 31,
2020
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
4,125,595
|
|
|
$
|
1,988,429
|
|
Short-term
investments
|
|
4,481,468
|
|
|
5,483,873
|
|
Accounts receivable,
net
|
|
954,265
|
|
|
1,041,743
|
|
Prepaid expenses and
other current assets
|
|
166,813
|
|
|
123,063
|
|
Total current
assets
|
|
9,728,141
|
|
|
8,637,108
|
|
Property and
equipment, net
|
|
1,884,790
|
|
|
1,493,794
|
|
Operating lease
right-of-use assets
|
|
1,153,017
|
|
|
930,139
|
|
Intangible assets,
net
|
|
57,513
|
|
|
58,338
|
|
Goodwill
|
|
1,325,200
|
|
|
1,312,346
|
|
Deferred tax assets,
net
|
|
936,121
|
|
|
796,326
|
|
Other
assets
|
|
238,443
|
|
|
151,039
|
|
Total
assets
|
|
$
|
15,323,225
|
|
|
$
|
13,379,090
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
325,446
|
|
|
$
|
194,281
|
|
Accrued and other
current liabilities
|
|
775,102
|
|
|
663,532
|
|
Convertible notes,
short-term
|
|
953,565
|
|
|
917,866
|
|
Operating lease
liabilities, short-term
|
|
203,806
|
|
|
177,147
|
|
Total current
liabilities
|
|
2,257,919
|
|
|
1,952,826
|
|
Convertible notes,
long-term
|
|
3,554,847
|
|
|
1,875,878
|
|
Senior notes,
long-term
|
|
693,491
|
|
|
692,994
|
|
Operating lease
liabilities, long-term
|
|
1,026,006
|
|
|
819,748
|
|
Deferred and other
long-term tax liabilities, net
|
|
40,791
|
|
|
31,463
|
|
Other long-term
liabilities
|
|
34,043
|
|
|
36,099
|
|
Total
liabilities
|
|
7,607,097
|
|
|
5,409,008
|
|
Stockholders'
equity:
|
|
|
|
|
Common
stock
|
|
4
|
|
|
4
|
|
Additional paid-in
capital
|
|
8,457,717
|
|
|
9,167,138
|
|
Treasury
stock
|
|
(5,298)
|
|
|
(5,297)
|
|
Accumulated other
comprehensive loss
|
|
(89,056)
|
|
|
(66,094)
|
|
Accumulated
deficit
|
|
(647,239)
|
|
|
(1,125,669)
|
|
Total stockholders'
equity
|
|
7,716,128
|
|
|
7,970,082
|
|
Total liabilities and
stockholders' equity
|
|
$
|
15,323,225
|
|
|
$
|
13,379,090
|
|
TWITTER,
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands,
except per share data)
(Unaudited)
|
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Revenue
|
|
$
|
1,190,427
|
|
|
$
|
683,438
|
|
|
$
|
2,226,445
|
|
|
$
|
1,491,075
|
|
Costs and
expenses
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
416,932
|
|
|
288,039
|
|
|
797,940
|
|
|
572,076
|
|
Research and
development
|
|
299,859
|
|
|
215,806
|
|
|
550,568
|
|
|
416,194
|
|
Sales and
marketing
|
|
301,902
|
|
|
207,286
|
|
|
536,494
|
|
|
428,573
|
|
General and
administrative (1)
|
|
141,482
|
|
|
246,237
|
|
|
259,009
|
|
|
355,605
|
|
Total costs and
expenses
|
|
1,160,175
|
|
|
957,368
|
|
|
2,144,011
|
|
|
1,772,448
|
|
Income (loss) from
operations
|
|
30,252
|
|
|
(273,930)
|
|
|
82,434
|
|
|
(281,373)
|
|
Interest
expense
|
|
(13,893)
|
|
|
(39,828)
|
|
|
(27,078)
|
|
|
(73,098)
|
|
Interest
income
|
|
9,202
|
|
|
25,013
|
|
|
20,203
|
|
|
57,910
|
|
Other income
(expense), net
|
|
55,739
|
|
|
(361)
|
|
|
55,745
|
|
|
(8,080)
|
|
Income (loss) before
income taxes
|
|
81,300
|
|
|
(289,106)
|
|
|
131,304
|
|
|
(304,641)
|
|
Provision (benefit)
for income taxes
|
|
15,651
|
|
|
1,088,899
|
|
|
(2,350)
|
|
|
1,081,760
|
|
Net income
(loss)
|
|
$
|
65,649
|
|
|
$
|
(1,378,005)
|
|
|
$
|
133,654
|
|
|
$
|
(1,386,401)
|
|
Net income (loss) per
share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.08
|
|
|
$
|
(1.75)
|
|
|
$
|
0.17
|
|
|
$
|
(1.77)
|
|
Diluted
|
|
$
|
0.08
|
|
|
$
|
(1.75)
|
|
|
$
|
0.16
|
|
|
$
|
(1.77)
|
|
Numerator used to
compute net income (loss) per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
65,649
|
|
|
$
|
(1,378,005)
|
|
|
$
|
133,654
|
|
|
$
|
(1,386,401)
|
|
Diluted
|
|
$
|
68,501
|
|
|
$
|
(1,378,005)
|
|
|
$
|
138,896
|
|
|
$
|
(1,386,401)
|
|
Weighted-average
shares used to compute net income (loss) per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
796,472
|
|
|
785,909
|
|
|
795,992
|
|
|
783,303
|
|
Diluted
|
|
869,180
|
|
|
785,909
|
|
|
870,622
|
|
|
783,303
|
|
|
|
|
|
|
|
|
|
|
(1)
In July 2020, prior to our filing of our Form 10-Q for the second
quarter of 2020, we received a draft complaint from the Federal
Trade Commission and recorded $150 million in general and
administrative expenses in the consolidated statements of
operations in the three and six months ended June 30,
2020.
|
TWITTER,
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In
thousands)
(Unaudited)
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Cash flows from
operating activities
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
65,649
|
|
|
$
|
(1,378,005)
|
|
|
$
|
133,654
|
|
|
$
|
(1,386,401)
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization expense
|
|
134,812
|
|
|
123,837
|
|
|
265,864
|
|
|
244,486
|
|
Stock-based
compensation expense
|
|
178,202
|
|
|
132,876
|
|
|
289,075
|
|
|
230,779
|
|
Amortization of
discount on convertible notes
|
|
—
|
|
|
26,556
|
|
|
—
|
|
|
48,060
|
|
Bad debt
expense
|
|
1,796
|
|
|
3,428
|
|
|
391
|
|
|
17,495
|
|
Deferred income
taxes
|
|
856
|
|
|
(19,013)
|
|
|
(23,017)
|
|
|
(26,037)
|
|
Deferred tax assets
valuation allowance establishment
|
|
—
|
|
|
1,101,374
|
|
|
—
|
|
|
1,101,374
|
|
Impairment (gain) on
investments in privately-held companies
|
|
(51,894)
|
|
|
500
|
|
|
(51,894)
|
|
|
8,503
|
|
Other
adjustments
|
|
(3,272)
|
|
|
3,240
|
|
|
1,467
|
|
|
(5,185)
|
|
Changes in assets and
liabilities, net of assets acquired and liabilities assumed
from acquisitions:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
(100,328)
|
|
|
65,349
|
|
|
88,969
|
|
|
234,281
|
|
Prepaid expenses and
other assets
|
|
36,469
|
|
|
9,209
|
|
|
(44,520)
|
|
|
2,957
|
|
Operating lease
right-of-use assets
|
|
54,803
|
|
|
39,368
|
|
|
104,049
|
|
|
78,117
|
|
Accounts
payable
|
|
27,626
|
|
|
(11,754)
|
|
|
2,818
|
|
|
(26,234)
|
|
Accrued and other
liabilities
|
|
92,861
|
|
|
143,743
|
|
|
99,243
|
|
|
4,575
|
|
Operating lease
liabilities
|
|
(55,613)
|
|
|
(39,692)
|
|
|
(93,948)
|
|
|
(78,987)
|
|
Net cash provided by
operating activities
|
|
381,967
|
|
|
201,016
|
|
|
772,151
|
|
|
447,783
|
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
(279,195)
|
|
|
(164,416)
|
|
|
(460,376)
|
|
|
(287,083)
|
|
Proceeds from sales of
property and equipment
|
|
3,002
|
|
|
2,282
|
|
|
4,837
|
|
|
3,905
|
|
Purchases of
marketable securities
|
|
(794,866)
|
|
|
(1,889,234)
|
|
|
(2,165,696)
|
|
|
(3,122,764)
|
|
Proceeds from
maturities of marketable securities
|
|
863,076
|
|
|
1,355,500
|
|
|
2,084,537
|
|
|
2,481,134
|
|
Proceeds from sales of
marketable securities
|
|
25,191
|
|
|
136,416
|
|
|
1,092,794
|
|
|
858,669
|
|
Purchases of
investments in privately-held companies
|
|
(630)
|
|
|
—
|
|
|
(31,497)
|
|
|
(1,339)
|
|
Investments in Finance
Justice Fund
|
|
(12,500)
|
|
|
—
|
|
|
(22,700)
|
|
|
—
|
|
Business combinations,
net of cash acquired
|
|
(14,559)
|
|
|
(19,505)
|
|
|
(22,937)
|
|
|
(34,285)
|
|
Other investing
activities
|
|
700
|
|
|
—
|
|
|
(8,385)
|
|
|
(11,050)
|
|
Net cash provided by
(used in) investing activities
|
|
(209,781)
|
|
|
(578,957)
|
|
|
470,577
|
|
|
(112,813)
|
|
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)
|
|
Repurchases of common
stock
|
|
(333,812)
|
|
|
—
|
|
|
(495,364)
|
|
|
—
|
|
Taxes paid related to
net share settlement of equity awards
|
|
(4,928)
|
|
|
(2,925)
|
|
|
(15,497)
|
|
|
(14,618)
|
|
Payments of finance
lease obligations
|
|
—
|
|
|
(6,490)
|
|
|
(565)
|
|
|
(16,456)
|
|
Proceeds from exercise
of stock options
|
|
28
|
|
|
118
|
|
|
1,986
|
|
|
423
|
|
Proceeds from
issuances of common stock under employee stock purchase
plan
|
|
39,531
|
|
|
34,395
|
|
|
39,531
|
|
|
34,395
|
|
Net cash provided by
(used in) financing activities
|
|
(299,181)
|
|
|
25,098
|
|
|
898,497
|
|
|
989,082
|
|
Net increase
(decrease) in cash, cash equivalents and restricted cash
|
|
(126,995)
|
|
|
(352,843)
|
|
|
2,141,225
|
|
|
1,324,052
|
|
Foreign exchange
effect on cash, cash equivalents and restricted cash
|
|
4,019
|
|
|
(3,830)
|
|
|
(3,999)
|
|
|
(15,778)
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
|
4,271,478
|
|
|
3,492,613
|
|
|
2,011,276
|
|
|
1,827,666
|
|
Cash, cash
equivalents and restricted cash at end of period
|
|
$
|
4,148,502
|
|
|
$
|
3,135,940
|
|
|
$
|
4,148,502
|
|
|
$
|
3,135,940
|
|
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
|
|
$
|
81,227
|
|
|
$
|
1,737
|
|
|
$
|
138,257
|
|
|
$
|
40,249
|
|
Reconciliation of
cash, cash equivalents and restricted cash as shown in the
consolidated statements of cash flows
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
4,125,595
|
|
|
$
|
3,112,454
|
|
|
$
|
4,125,595
|
|
|
$
|
3,112,454
|
|
Restricted cash
included in prepaid expenses and other current assets
|
|
3,286
|
|
|
2,900
|
|
|
3,286
|
|
|
2,900
|
|
Restricted cash
included in other assets
|
|
19,621
|
|
|
20,586
|
|
|
19,621
|
|
|
20,586
|
|
Total cash, cash
equivalents and restricted cash
|
|
$
|
4,148,502
|
|
|
$
|
3,135,940
|
|
|
$
|
4,148,502
|
|
|
$
|
3,135,940
|
|
TWITTER,
INC.
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands,
except per share data)
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Non-GAAP net
income (loss):
|
|
|
|
|
|
|
|
|
Net income (loss)
(1)
|
|
$
|
65,649
|
|
|
$
|
(1,378,005)
|
|
|
$
|
133,654
|
|
|
$
|
(1,386,401)
|
|
Exclude: Provision
(benefit) for income taxes
|
|
15,651
|
|
|
1,088,899
|
|
|
(2,350)
|
|
|
1,081,760
|
|
Income (loss) before
income taxes
|
|
81,300
|
|
|
(289,106)
|
|
|
131,304
|
|
|
(304,641)
|
|
Stock-based
compensation expense
|
|
178,202
|
|
|
132,876
|
|
|
289,075
|
|
|
230,779
|
|
Amortization of
acquired intangible assets
|
|
11,732
|
|
|
7,519
|
|
|
19,839
|
|
|
12,560
|
|
Non-cash interest
expense related to convertible notes (2)
|
|
—
|
|
|
26,556
|
|
|
—
|
|
|
48,060
|
|
Impairment (gain) on
investments in privately-held companies
|
|
(51,894)
|
|
|
500
|
|
|
(51,894)
|
|
|
8,503
|
|
Non-GAAP income (loss)
before income taxes
|
|
219,340
|
|
|
(121,655)
|
|
|
388,324
|
|
|
(4,739)
|
|
Non-GAAP provision for
income taxes (3)
|
|
44,821
|
|
|
1,118,723
|
|
|
72,594
|
|
|
1,148,231
|
|
Non-GAAP net income
(loss)
|
|
$
|
174,519
|
|
|
$
|
(1,240,378)
|
|
|
$
|
315,730
|
|
|
$
|
(1,152,970)
|
|
Non-GAAP diluted
net income (loss) per share:
|
|
|
|
|
|
|
|
|
Non-GAAP net income
(loss)
|
|
$
|
174,519
|
|
|
$
|
(1,240,378)
|
|
|
$
|
315,730
|
|
|
$
|
(1,152,970)
|
|
Plus: interest expense
on convertible notes, net of tax (4)
|
|
5,100
|
|
|
—
|
|
|
9,690
|
|
|
—
|
|
Numerator used to
compute non-GAAP diluted net income (loss) per share
|
|
$
|
179,619
|
|
|
$
|
(1,240,378)
|
|
|
$
|
325,420
|
|
|
$
|
(1,152,970)
|
|
GAAP diluted shares
(5)
|
|
869,180
|
|
|
785,909
|
|
|
870,622
|
|
|
783,303
|
|
Non-GAAP dilutive
securities (6)
|
|
12,287
|
|
|
—
|
|
|
12,287
|
|
|
—
|
|
Non-GAAP diluted
shares
|
|
881,467
|
|
|
785,909
|
|
|
882,909
|
|
|
783,303
|
|
Non-GAAP diluted net
income (loss) per share
|
|
$
|
0.20
|
|
|
$
|
(1.58)
|
|
|
$
|
0.37
|
|
|
$
|
(1.47)
|
|
Adjusted
EBITDA:
|
|
|
|
|
|
|
|
|
Net income (loss)
(1)
|
|
$
|
65,649
|
|
|
$
|
(1,378,005)
|
|
|
$
|
133,654
|
|
|
$
|
(1,386,401)
|
|
Stock-based
compensation expense
|
|
178,202
|
|
|
132,876
|
|
|
289,075
|
|
|
230,779
|
|
Depreciation and
amortization expense
|
|
134,812
|
|
|
123,837
|
|
|
265,864
|
|
|
244,486
|
|
Interest and other
expense (income), net
|
|
(51,048)
|
|
|
15,176
|
|
|
(48,870)
|
|
|
23,268
|
|
Provision (benefit)
for income taxes
|
|
15,651
|
|
|
1,088,899
|
|
|
(2,350)
|
|
|
1,081,760
|
|
Adjusted
EBITDA
|
|
$
|
343,266
|
|
|
$
|
(17,217)
|
|
|
$
|
637,373
|
|
|
$
|
193,892
|
|
Stock-based
compensation expense by function:
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
$
|
13,120
|
|
|
$
|
8,996
|
|
|
$
|
21,852
|
|
|
$
|
14,752
|
|
Research and
development
|
|
103,312
|
|
|
77,988
|
|
|
168,468
|
|
|
138,575
|
|
Sales and
marketing
|
|
36,371
|
|
|
29,183
|
|
|
57,542
|
|
|
48,022
|
|
General and
administrative
|
|
25,399
|
|
|
16,709
|
|
|
41,213
|
|
|
29,430
|
|
Total stock-based
compensation expense
|
|
$
|
178,202
|
|
|
$
|
132,876
|
|
|
$
|
289,075
|
|
|
$
|
230,779
|
|
Amortization of
acquired intangible assets by function:
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
$
|
6,973
|
|
|
$
|
7,519
|
|
|
$
|
13,472
|
|
|
$
|
12,560
|
|
Research and
development
|
|
4,609
|
|
|
—
|
|
|
6,117
|
|
|
—
|
|
Sales and
marketing
|
|
150
|
|
|
—
|
|
|
250
|
|
|
—
|
|
Total amortization of
acquired intangible assets
|
|
$
|
11,732
|
|
|
$
|
7,519
|
|
|
$
|
19,839
|
|
|
$
|
12,560
|
|
Non-GAAP costs and
expenses:
|
|
|
|
|
|
|
|
|
Total costs and
expenses
|
|
$
|
1,160,175
|
|
|
$
|
957,368
|
|
|
$
|
2,144,011
|
|
|
$
|
1,772,448
|
|
Less: stock-based
compensation expense
|
|
(178,202)
|
|
|
(132,876)
|
|
|
(289,075)
|
|
|
(230,779)
|
|
Less: amortization of
acquired intangible assets
|
|
(11,732)
|
|
|
(7,519)
|
|
|
(19,839)
|
|
|
(12,560)
|
|
Total non-GAAP costs
and expenses
|
|
$
|
970,241
|
|
|
$
|
816,973
|
|
|
$
|
1,835,097
|
|
|
$
|
1,529,109
|
|
TWITTER,
INC.
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands,
except per share data)
(Unaudited)
(Continued)
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Adjusted free cash
flow:
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
|
381,967
|
|
|
$
|
201,016
|
|
|
$
|
772,151
|
|
|
$
|
447,783
|
|
Less: purchases of
property and equipment
|
|
(279,195)
|
|
|
(164,416)
|
|
|
(460,376)
|
|
|
(287,083)
|
|
Plus: proceeds from
sales of property and equipment
|
|
3,002
|
|
|
2,282
|
|
|
4,837
|
|
|
3,905
|
|
Adjusted free cash
flow
|
|
$
|
105,774
|
|
|
$
|
38,882
|
|
|
$
|
316,612
|
|
|
$
|
164,605
|
|
Adjusted net
income (loss):
|
|
|
|
|
|
|
|
|
Net income (loss)
(1)
|
|
$
|
65,649
|
|
|
$
|
(1,378,005)
|
|
|
$
|
133,654
|
|
|
$
|
(1,386,401)
|
|
Exclude: provision for
deferred tax assets valuation allowance (7)
|
|
—
|
|
|
1,101,374
|
|
|
—
|
|
|
1,101,374
|
|
Adjusted net income
(loss)
|
|
$
|
65,649
|
|
|
$
|
(276,631)
|
|
|
$
|
133,654
|
|
|
$
|
(285,027)
|
|
Adjusted diluted
net income (loss) per share:
|
|
|
|
|
|
|
|
|
Adjusted net income
(loss)
|
|
$
|
65,649
|
|
|
$
|
(276,631)
|
|
|
$
|
133,654
|
|
|
$
|
(285,027)
|
|
Plus: interest expense
on convertible notes, net of tax (8)
|
|
2,852
|
|
|
—
|
|
|
5,242
|
|
|
—
|
|
Numerator used to
compute adjusted diluted net income (loss) per share
|
|
$
|
68,501
|
|
|
$
|
(276,631)
|
|
|
$
|
138,896
|
|
|
$
|
(285,027)
|
|
GAAP diluted
shares
|
|
869,180
|
|
|
785,909
|
|
|
870,622
|
|
|
783,303
|
|
Adjusted diluted net
income (loss) per share
|
|
$
|
0.08
|
|
|
$
|
(0.35)
|
|
|
$
|
0.16
|
|
|
$
|
(0.36)
|
|
|
|
|
|
|
|
|
|
|
(1) In
July 2020, prior to our filing of our Form 10-Q for the second
quarter of 2020, we received a draft complaint from the Federal
Trade Commission and recorded $150 million in general and
administrative expenses in the consolidated statements of
operations in the three and six months ended June 30,
2020.
|
(2) The Company 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.
|
(3) The
non-GAAP provision for income taxes for the three and six months
ended June 30, 2020 includes a provision for income taxes of $1.11
billion related to the establishment of a valuation allowance
against deferred tax assets.
|
(4) In the
three and six months ended June 30, 2021, interest expense on the
2021 convertible notes, 2024 convertible notes, 2025 convertible
notes, and 2026 convertible notes, net of any income tax effects,
are added back to the numerator for purposes of the if-converted
method used to calculate non-GAAP diluted net income per share upon
adoption of the new accounting standard update to simplify the
accounting for convertible debt as of January 1, 2021.
|
(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 six months ended June 30,
2020 due to the GAAP net loss position. GAAP diluted shares in the
three and six months ended June 30, 2021 reflect the dilutive
effect of the 2024 convertible notes, 2025 convertible notes, and
2026 convertible notes upon adoption of the new accounting standard
update to simplify the accounting for convertible debt as of
January 1, 2021. In the three and six months ended June 30, 2021,
the 2021 convertible notes were not included in the computation of
GAAP diluted shares as the effect of including these shares in the
calculation would have been anti-dilutive.
|
(6) In the
three and six months ended June 30, 2021, the 2021 convertible
notes were included in the computation of Non-GAAP diluted shares
as the effect of including these shares in the calculation is
dilutive.
|
(7) The
provision for deferred tax assets valuation allowance in the three
and six months ended June 30, 2020 is related to the establishment
of a valuation allowance against deferred tax assets.
|
(8) In the three and six months ended
June 30, 2021, interest expense on the 2024 convertible notes, 2025
convertible notes and 2026 convertible notes, net of any income tax
effects, are added back to the numerator for purposes of the
if-converted method used to calculate adjusted diluted net income
per share upon adoption of the new accounting standard update to
simplify the accounting for convertible debt as of January 1,
2021.
|
TWITTER,
INC.
RECONCILIATION OF
GAAP REVENUE TO NON-GAAP CONSTANT CURRENCY REVENUE
(In
millions)
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
|
|
June
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
|
|
$
|
1,190
|
|
|
$
|
683
|
|
|
$
|
2,226
|
|
|
$
|
1,491
|
|
Foreign exchange
effect on 2021 revenue using 2020 rates
|
|
(15)
|
|
|
|
|
(26)
|
|
|
|
Revenue excluding
foreign exchange effect
|
|
$
|
1,175
|
|
|
|
|
$
|
2,200
|
|
|
|
Revenue
year-over-year change percent
|
|
74
|
%
|
|
|
|
49
|
%
|
|
|
Revenue excluding
foreign exchange effect year-over-year change percent
|
|
72
|
%
|
|
|
|
48
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Advertising
revenue
|
|
$
|
1,053
|
|
|
$
|
562
|
|
|
$
|
1,952
|
|
|
$
|
1,244
|
|
Foreign exchange
effect on 2021 advertising revenue using 2020 rates
|
|
(15)
|
|
|
|
|
(26)
|
|
|
|
Advertising revenue
excluding foreign exchange effect
|
|
$
|
1,038
|
|
|
|
|
$
|
1,926
|
|
|
|
Advertising revenue
year-over-year change percent
|
|
87
|
%
|
|
|
|
57
|
%
|
|
|
Advertising revenue
excluding foreign exchange effect year-over-year change
percent
|
|
85
|
%
|
|
|
|
55
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Data licensing and
other revenue
|
|
$
|
137
|
|
|
$
|
121
|
|
|
$
|
274
|
|
|
$
|
247
|
|
Foreign exchange
effect on 2021 data licensing and other revenue using 2020
rates
|
|
—
|
|
|
|
|
—
|
|
|
|
Data licensing and
other revenue excluding foreign exchange effect
|
|
$
|
137
|
|
|
|
|
$
|
274
|
|
|
|
Data licensing and
other revenue year-over-year change percent
|
|
13
|
%
|
|
|
|
11
|
%
|
|
|
Data licensing and
other revenue excluding foreign exchange effect year-over-year
change percent
|
|
13
|
%
|
|
|
|
11
|
%
|
|
|
|
|
|
|
|
|
|
|
|
International
revenue
|
|
$
|
537
|
|
|
$
|
319
|
|
|
$
|
1,017
|
|
|
$
|
658
|
|
Foreign exchange
effect on 2021 international revenue using 2020 rates
|
|
(15)
|
|
|
|
|
(26)
|
|
|
|
International revenue
excluding foreign exchange effect
|
|
$
|
522
|
|
|
|
|
$
|
991
|
|
|
|
International revenue
year-over-year change percent
|
|
69
|
%
|
|
|
|
55
|
%
|
|
|
International revenue
excluding foreign exchange effect year-over-year change
percent
|
|
64
|
%
|
|
|
|
51
|
%
|
|
|
|
|
|
|
|
|
|
|
|
International
advertising revenue
|
|
$
|
491
|
|
|
$
|
279
|
|
|
$
|
926
|
|
|
$
|
579
|
|
Foreign exchange
effect on 2021 international advertising revenue using 2020
rates
|
|
(15)
|
|
|
|
|
(26)
|
|
|
|
International
advertising revenue excluding foreign exchange effect
|
|
$
|
476
|
|
|
|
|
$
|
900
|
|
|
|
International
advertising revenue year-over-year change percent
|
|
76
|
%
|
|
|
|
60
|
%
|
|
|
International
advertising revenue excluding foreign exchange effect
year-over-year change percent
|
|
71
|
%
|
|
|
|
55
|
%
|
|
|
|
|
|
|
|
|
|
|
|
(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-second-quarter-2021-results-301339855.html
SOURCE Twitter, Inc.