UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
July 28, 2015
Twitter, Inc.
(Exact name of registrant as specified in its charter)
|
Delaware |
|
001-36164 |
|
20-8913779 |
|
(State or other jurisdiction of |
|
(Commission File Number) |
|
(IRS Employer |
1355 Market Street, Suite 900
San Francisco, California 94103
(Address of principal executive offices, including zip code)
(415) 222-9670
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
|
¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition.
On July 28, 2015, Twitter, Inc. (the “Company”) issued a press release announcing its financial results for the second quarter of 2015. In the press release, the Company also announced that it would be holding a conference call on July 28, 2015 to discuss its financial results for the second quarter of 2015. The full text of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
This information is intended to be furnished under Item 2.02 of Form 8-K, “Results of Operations and Financial Condition” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
|
(d) |
Exhibits. |
|
Exhibit Number |
|
Description |
|
99.1 |
|
Press release issued by Twitter, Inc. dated July 28, 2015. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
TWITTER, INC. |
||
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By: |
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/s/ Vijaya Gadde |
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|
|
Vijaya Gadde |
|
|
|
General Counsel & Secretary |
Date: July 28, 2015
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Exhibit Number |
|
Description |
|
99.1 |
|
Press release issued by Twitter, Inc. dated July 28, 2015. |
Exhibit 99.1
July 28, 2015
Twitter Reports Second Quarter 2015 Results
SAN FRANCISCO, California - Twitter, Inc. (NYSE: TWTR) today announced financial results for the quarter ended June 30, 2015.
|
· |
Q2 revenue of $502 million, up 61% year-over-year, and above the previously forecast range of $470 million to $485 million. Excluding the impact of year-over-year changes in foreign exchange rates, revenue would have increased 68% |
|
· |
Q2 GAAP net loss of $137 million and non-GAAP net income of $49 million |
|
· |
Q2 GAAP EPS of ($0.21) and non-GAAP diluted EPS of $0.07 |
|
· |
Q2 adjusted EBITDA of $120 million, up 122% year-over-year, and above the previously forecast range of $97 million to $102 million, representing an adjusted EBITDA margin of 24% |
“Our Q2 results show good progress in monetization, but we are not satisfied with our growth in audience,” said Jack Dorsey, interim CEO of Twitter. “In order to realize Twitter’s full potential, we must improve in three key areas: ensure more disciplined execution, simplify our service to deliver Twitter's value faster, and better communicate that value.”
.
Second Quarter 2015 Financial Summary
(In thousands, except per share data)
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
||||
|
GAAP Results |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
502,383 |
|
|
$ |
312,166 |
|
|
$ |
938,322 |
|
|
$ |
562,658 |
|
|
Net loss |
$ |
(136,663 |
) |
|
$ |
(144,642 |
) |
|
$ |
(299,105 |
) |
|
$ |
(277,004 |
) |
|
Diluted net loss per share |
$ |
(0.21 |
) |
|
$ |
(0.24 |
) |
|
$ |
(0.46 |
) |
|
$ |
(0.47 |
) |
|
Non-GAAP Results |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
120,188 |
|
|
$ |
54,131 |
|
|
$ |
224,241 |
|
|
$ |
91,080 |
|
|
Non-GAAP net income |
$ |
48,518 |
|
|
$ |
14,596 |
|
|
$ |
95,026 |
|
|
$ |
14,779 |
|
|
Non-GAAP diluted net income per share |
$ |
0.07 |
|
|
$ |
0.02 |
|
|
$ |
0.14 |
|
|
$ |
0.02 |
|
For additional information regarding the non-GAAP financial measures discussed in this release, please see “Non-GAAP Financial Measures” and “Reconciliation of GAAP to Non-GAAP Financial Measures” below.
Second Quarter 2015 Operational and Product Highlights
Monthly Active Users – Average Monthly Active Users (MAUs) were 316 million for the second quarter, up 15% year-over-year, and compared to 308 million in the previous quarter. The vast majority of MAUs added in the quarter on a sequential basis came from SMS Fast Followers. Excluding SMS Fast Followers, MAUs were 304 million for the second quarter, up 12% year-over-year, and compared to 302 million in the previous quarter. Mobile MAUs represented approximately 80% of total MAUs.
1
Consumer Products – Twitter launched a new autoplay feature for native videos, Vines and GIFs, as well as Periscope live video streaming on Android.
Advertising Products –Twitter launched objective-based campaigns, reports and pricing to all advertisers globally in order to drive higher ROI. Twitter also introduced installed application category targeting, a new feature that enables app advertisers to reach mobile users based on the categories of apps they have installed on their device. Twitter also rolled out Audience Insights, a tool that provides advertisers with aggregate information such as user demographics, interests, and purchasing behavior so they can better understand their key audiences.
Partnerships – Twitter announced a partnership with Google’s DoubleClick platform to improve advertising performance measurement and attribution for Twitter direct response marketers. As part of the partnership, Twitter will also make its inventory available through the DoubleClick Bid Manager platform. Twitter also launched its Official Partner Program, a new initiative combining industry-leading product and service partners that help businesses achieve better results on Twitter and beyond.
Developers – Twitter’s mobile developer conference, Flock, continued its world tour with events in Asia Pacific and Latin America. In addition, Twitter announced a standalone Digits kit and introduced open sourcing for both Fabric and Digits kits on Android.
Acquired Companies – Twitter acquired TellApart, a leading marketing technology company providing retailers and e-commerce advertisers with unique cross-device retargeting capabilities through dynamic product ads and email marketing, and Whetlab, a startup focused on machine learning and artificial intelligence.
Second Quarter 2015 Financial Highlights
Revenue – Revenue for the second quarter of 2015 totaled $502 million, an increase of 61% compared to $312 million in the same period in 2014. Excluding the impact of year-over-year changes in foreign exchange rates, revenue would have increased 68%.
|
· |
Advertising revenue totaled $452 million, an increase of 63% year-over-year. Excluding the impact of year-over-year changes in foreign exchange rates, advertising revenue would have increased 71%. |
|
· |
Mobile advertising revenue was 88% of total advertising revenue. |
|
· |
Data licensing and other revenue totaled $50 million, an increase of 44% year-over-year. |
|
· |
US revenue totaled $321 million, an increase of 53% year-over-year. |
|
· |
International revenue totaled $181 million, an increase of 78% year-over-year. |
Net loss – GAAP net loss was $137 million for the second quarter of 2015 compared to $145 million in the same period in 2014. GAAP net loss for the second quarter of 2015 included $175 million of stock-based compensation expense.
Adjusted EBITDA – Adjusted EBITDA was $120 million for the second quarter of 2015, an increase of 122% compared to $54 million in the same period in 2014.
Non-GAAP net income – Non-GAAP net income was $49 million for the second quarter of 2015 compared to $15 million in the same period in 2014.
EPS – Basic and diluted GAAP EPS was ($0.21) for the second quarter of 2015 compared to ($0.24) in the same period in 2014.
Non-GAAP diluted EPS – Non-GAAP diluted EPS was $0.07 for the second quarter of 2015 compared to $0.02 in the same period in 2014.
Capital expenditures – Purchases of property and equipment for the second quarter of 2015 were $93 million. Additionally, $6 million of equipment purchases were financed through capital leases during the second quarter of 2015.
2
Cash, cash equivalents and marketable securities – As of June 30, 2015, cash, cash equivalents, and marketable securities were approximately $3.6 billion, compared to $3.6 billion as of March 31, 2015.
Outlook
Twitter’s outlook for the third quarter of 2015 is as follows:
|
· |
Revenue is projected to be in the range of $545 million to $560 million. |
|
· |
Adjusted EBITDA is projected to be in the range of $110 million to $115 million. |
|
· |
Stock-based compensation expense is projected to be in the range of $190 million to $200 million, excluding the impact of equity awards that may be granted in connection with potential future acquisitions. |
Twitter’s outlook for the full year of 2015 is as follows:
|
· |
Revenue is projected to be in the range of $2.20 billion to $2.27 billion. |
|
· |
Adjusted EBITDA is projected to be in the range of $520 million to $540 million. |
|
· |
Capital expenditures are projected to be in the range of $450 million to $550 million. |
|
· |
Stock-based compensation expense is projected to be in the range of $750 million to $790 million, excluding the impact of equity awards that may be granted in connection with potential future acquisitions. |
Note that Twitter’s outlook for the third quarter and full year of 2015 reflects foreign exchange rates as of July 15, 2015.
Webcast and Conference Call Details
Twitter will host a conference call today, Tuesday, July 28, 2015, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss financial results. Questions submitted via Twitter, directed to @TwitterIR, using the hashtag #TWTRearnings will be considered during the Q&A portion of the conference call in addition to questions submitted by conference call participants. A live webcast of the conference call, Twitter’s financial results and supplemental slides will be accessible from the Investor Relations page of Twitter’s website at investor.twitterinc.com. A replay will be archived and accessible at the same website after the conference call. Twitter has used, and intends to continue to use, its Investor Relations website (investor.twitterinc.com), as well as certain Twitter accounts (@jack, @twitter and @twitterIR), as means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.
About Twitter, Inc.
Twitter (NYSE: TWTR) is a global platform for public self-expression and conversation in real time. By developing a fundamentally new way for people to consume, create, distribute and discover content, Twitter enables any voice to echo around the world instantly and unfiltered. The service can be accessed at Twitter.com, on a variety of mobile devices, and via SMS. Available in more than 35 languages, Twitter has 316 million monthly active users. For more information, visit about.twitter.com or follow @twitter.
3
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," "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, plans or intentions. Forward-looking statements in this press release include, but are not limited to, Twitter's strategies and business plans, Twitter's expectations regarding its revenue, adjusted EBITDA, capital expenditures and stock-based compensation expense for the third quarter and full year 2015. 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 continue to grow; 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 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, 2014 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 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 June 30, 2015. 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, or GAAP, Twitter considers certain financial measures that are not prepared in accordance with GAAP, including revenue excluding foreign exchange effect, advertising revenue excluding foreign exchange effect, adjusted EBITDA, non-GAAP net income (loss), adjusted EBITDA margin and non-GAAP diluted EPS. Twitter defines adjusted EBITDA as net loss adjusted to exclude stock-based compensation expense, depreciation and amortization expense, interest and other expenses, net and provision (benefit) for income taxes; and Twitter defines non-GAAP net income (loss) as net loss adjusted to exclude stock-based compensation expense, amortization of acquired intangible assets, non-cash interest expense related to convertible notes, non-cash expense related to acquisitions and the income tax effects related to acquisitions. Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by revenue.
Twitter uses the non-GAAP financial measures of adjusted EBITDA, non-GAAP net income (loss), 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 (loss), adjusted EBITDA margin and non-GAAP diluted EPS help identify underlying trends in its business that could otherwise be masked by the effect of the expenses that we exclude in adjusted EBITDA, non-GAAP net income (loss), adjusted EBITDA margin and non-GAAP diluted EPS. Twitter also believes that adjusted EBITDA, non-GAAP net income (loss), 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. Twitter translated revenue and advertising revenue for the quarter and six months ended June 30, 2015 using the prior year's monthly exchange rates for its settlement currencies other than the U.S. dollar, which Twitter believes is a useful metric that facilitates comparison to its historical performance. 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.
4
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.
For future periods, Twitter is unable to provide a reconciliation of adjusted EBITDA to net loss as a result of the uncertainty regarding, and the potential variability of, depreciation and amortization expense, interest and other expenses, net and provision (benefit) for income taxes, that are expected to be incurred in the future.
Contacts
Investors:
Dave Rivinus
ir@twitter.com
Press:
Jim Prosser
jprosser@twitter.com
5
TWITTER, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2015 |
|
|
2014 |
|
||
|
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
883,307 |
|
|
$ |
1,510,724 |
|
|
Short-term investments |
|
2,677,263 |
|
|
|
2,111,154 |
|
|
Accounts receivable, net |
|
475,204 |
|
|
|
418,454 |
|
|
Prepaid expenses and other current assets |
|
234,653 |
|
|
|
215,521 |
|
|
Total current assets |
|
4,270,427 |
|
|
|
4,255,853 |
|
|
Property and equipment, net |
|
651,017 |
|
|
|
557,019 |
|
|
Intangible assets |
|
156,352 |
|
|
|
105,011 |
|
|
Goodwill |
|
1,102,193 |
|
|
|
622,570 |
|
|
Other assets |
|
50,345 |
|
|
|
42,629 |
|
|
Total assets |
$ |
6,230,334 |
|
|
$ |
5,583,082 |
|
|
Liabilities and stockholders’ equity |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
$ |
51,614 |
|
|
$ |
53,241 |
|
|
Accrued and other current liabilities |
|
274,621 |
|
|
|
228,233 |
|
|
Capital leases, short-term |
|
98,606 |
|
|
|
112,320 |
|
|
Total current liabilities |
|
424,841 |
|
|
|
393,794 |
|
|
Convertible notes |
|
1,414,896 |
|
|
|
1,376,020 |
|
|
Capital leases, long-term |
|
83,381 |
|
|
|
118,950 |
|
|
Deferred and other long-term tax liabilities, net |
|
31,768 |
|
|
|
24,706 |
|
|
Other long-term liabilities |
|
44,264 |
|
|
|
43,209 |
|
|
Total liabilities |
|
1,999,150 |
|
|
|
1,956,679 |
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Common stock |
|
3 |
|
|
|
3 |
|
|
Additional paid-in capital |
|
6,135,566 |
|
|
|
5,208,870 |
|
|
Accumulated other comprehensive loss |
|
(32,834 |
) |
|
|
(10,024 |
) |
|
Accumulated deficit |
|
(1,871,551 |
) |
|
|
(1,572,446 |
) |
|
Total stockholders’ equity |
|
4,231,184 |
|
|
|
3,626,403 |
|
|
Total liabilities and stockholders’ equity |
$ |
6,230,334 |
|
|
$ |
5,583,082 |
|
|
|
|
|
|
|
|
|
|
6
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
||||
|
Revenue |
$ |
502,383 |
|
|
$ |
312,166 |
|
|
$ |
938,322 |
|
|
$ |
562,658 |
|
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue |
|
167,623 |
|
|
|
100,027 |
|
|
|
311,098 |
|
|
|
185,530 |
|
|
Research and development |
|
198,907 |
|
|
|
177,095 |
|
|
|
388,653 |
|
|
|
326,486 |
|
|
Sales and marketing |
|
201,948 |
|
|
|
140,261 |
|
|
|
385,505 |
|
|
|
246,496 |
|
|
General and administrative |
|
64,909 |
|
|
|
44,694 |
|
|
|
130,686 |
|
|
|
83,428 |
|
|
Total costs and expenses |
|
633,387 |
|
|
|
462,077 |
|
|
|
1,215,942 |
|
|
|
841,940 |
|
|
Loss from operations |
|
(131,004 |
) |
|
|
(149,911 |
) |
|
|
(277,620 |
) |
|
|
(279,282 |
) |
|
Interest expense |
|
(24,437 |
) |
|
|
(2,654 |
) |
|
|
(48,756 |
) |
|
|
(5,756 |
) |
|
Other income (expense), net |
|
(695 |
) |
|
|
2,324 |
|
|
|
8,430 |
|
|
|
3,657 |
|
|
Loss before income taxes |
|
(156,136 |
) |
|
|
(150,241 |
) |
|
|
(317,946 |
) |
|
|
(281,381 |
) |
|
Benefit from income taxes |
|
(19,473 |
) |
|
|
(5,599 |
) |
|
|
(18,841 |
) |
|
|
(4,377 |
) |
|
Net loss |
$ |
(136,663 |
) |
|
$ |
(144,642 |
) |
|
$ |
(299,105 |
) |
|
$ |
(277,004 |
) |
|
Net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
$ |
(0.21 |
) |
|
$ |
(0.24 |
) |
|
$ |
(0.46 |
) |
|
$ |
(0.47 |
) |
|
Weighted-average shares used to compute net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
655,721 |
|
|
|
595,607 |
|
|
|
648,143 |
|
|
|
587,760 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
||||
|
Cash flows from operating activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(136,663 |
) |
|
$ |
(144,642 |
) |
|
$ |
(299,105 |
) |
|
$ |
(277,004 |
) |
|
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
76,049 |
|
|
|
45,631 |
|
|
|
143,913 |
|
|
|
85,582 |
|
|
Stock-based compensation expense |
|
175,143 |
|
|
|
158,411 |
|
|
|
357,948 |
|
|
|
284,780 |
|
|
Amortization of discount on convertible notes |
|
17,006 |
|
|
|
— |
|
|
|
33,644 |
|
|
|
— |
|
|
Provision for bad debt |
|
553 |
|
|
|
658 |
|
|
|
3,345 |
|
|
|
1,436 |
|
|
Deferred income tax benefit |
|
(22,364 |
) |
|
|
(7,747 |
) |
|
|
(24,306 |
) |
|
|
(7,737 |
) |
|
Other non-cash adjustments |
|
1,214 |
|
|
|
(1,589 |
) |
|
|
(5,197 |
) |
|
|
666 |
|
|
Changes in assets and liabilities, net of assets acquired and liabilities assumed from acquisitions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
(39,785 |
) |
|
|
(46,074 |
) |
|
|
(43,944 |
) |
|
|
(37,213 |
) |
|
Prepaid expenses and other assets |
|
(5,221 |
) |
|
|
13,186 |
|
|
|
(7,861 |
) |
|
|
(17,229 |
) |
|
Accounts payable |
|
(9,723 |
) |
|
|
1,710 |
|
|
|
(11,437 |
) |
|
|
1,407 |
|
|
Accrued and other liabilities |
|
33,770 |
|
|
|
62,153 |
|
|
|
35,160 |
|
|
|
89,692 |
|
|
Net cash provided by operating activities |
|
89,979 |
|
|
|
81,697 |
|
|
|
182,160 |
|
|
|
124,380 |
|
|
Cash flows from investing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property and equipment |
|
(92,605 |
) |
|
|
(44,457 |
) |
|
|
(160,340 |
) |
|
|
(94,077 |
) |
|
Purchases of marketable securities |
|
(1,505,704 |
) |
|
|
(568,264 |
) |
|
|
(2,235,497 |
) |
|
|
(1,039,014 |
) |
|
Proceeds from maturities of marketable securities |
|
629,732 |
|
|
|
532,593 |
|
|
|
1,342,137 |
|
|
|
1,009,926 |
|
|
Proceeds from sales of marketable securities |
|
156,630 |
|
|
|
— |
|
|
|
335,261 |
|
|
|
168,138 |
|
|
Changes in restricted cash |
|
(435 |
) |
|
|
422 |
|
|
|
(3,797 |
) |
|
|
(11,716 |
) |
|
Business combinations, net of cash acquired |
|
2,627 |
|
|
|
(132,496 |
) |
|
|
(26,300 |
) |
|
|
(132,496 |
) |
|
Purchases of cost method investments and others |
|
(5,000 |
) |
|
|
(400 |
) |
|
|
(7,000 |
) |
|
|
(400 |
) |
|
Net cash provided by investing activities |
|
(814,755 |
) |
|
|
(212,602 |
) |
|
|
(755,536 |
) |
|
|
(99,639 |
) |
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxes paid related to net share settlement of equity awards |
|
(306 |
) |
|
|
(1,028 |
) |
|
|
(6,480 |
) |
|
|
(16,168 |
) |
|
Repayments of capital lease obligations |
|
(29,388 |
) |
|
|
(21,365 |
) |
|
|
(62,934 |
) |
|
|
(42,886 |
) |
|
Proceeds from exercise of stock options |
|
3,213 |
|
|
|
14,557 |
|
|
|
6,962 |
|
|
|
15,907 |
|
|
Proceeds from issuances of common stock under employee stock purchase plan |
|
21,600 |
|
|
|
21,224 |
|
|
|
21,600 |
|
|
|
21,224 |
|
|
Other financing activities |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,162 |
) |
|
Net cash provided by (used in) financing activities |
|
(4,881 |
) |
|
|
13,388 |
|
|
|
(40,852 |
) |
|
|
(23,085 |
) |
|
Net increase (decrease) in cash and cash equivalents |
|
(729,657 |
) |
|
|
(117,517 |
) |
|
|
(614,228 |
) |
|
|
1,656 |
|
|
Foreign exchange effect on cash and cash equivalents |
|
5,559 |
|
|
|
1,738 |
|
|
|
(13,189 |
) |
|
|
2,310 |
|
|
Cash and cash equivalents at beginning of period |
|
1,607,405 |
|
|
|
960,755 |
|
|
|
1,510,724 |
|
|
|
841,010 |
|
|
Cash and cash equivalents at end of period |
$ |
883,307 |
|
|
$ |
844,976 |
|
|
$ |
883,307 |
|
|
$ |
844,976 |
|
|
Supplemental disclosures of non-cash investing and financing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued in connection with acquisitions |
$ |
458,859 |
|
|
$ |
51,846 |
|
|
$ |
516,538 |
|
|
$ |
51,846 |
|
|
Equipment purchases under capital leases |
$ |
5,723 |
|
|
$ |
30,782 |
|
|
$ |
10,544 |
|
|
$ |
47,739 |
|
|
Changes in accrued equipment purchases |
$ |
(3,273 |
) |
|
$ |
32,546 |
|
|
$ |
9,087 |
|
|
$ |
43,597 |
|
8
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, |
|
||||||||||
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
||||
|
Non-GAAP net income and net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(136,663 |
) |
|
$ |
(144,642 |
) |
|
$ |
(299,105 |
) |
|
$ |
(277,004 |
) |
|
Stock-based compensation expense |
|
175,143 |
|
|
|
158,411 |
|
|
|
357,948 |
|
|
|
284,780 |
|
|
Amortization of acquired intangible assets |
|
13,965 |
|
|
|
8,099 |
|
|
|
24,760 |
|
|
|
14,275 |
|
|
Non-cash interest expense related to convertible notes |
|
17,006 |
|
|
|
— |
|
|
|
33,644 |
|
|
|
— |
|
|
Non-cash expense related to acquisitions |
|
926 |
|
|
|
— |
|
|
|
926 |
|
|
|
— |
|
|
Income tax effects related to acquisitions |
|
(21,859 |
) |
|
|
(7,272 |
) |
|
|
(23,147 |
) |
|
|
(7,272 |
) |
|
Non-GAAP net income |
$ |
48,518 |
|
|
$ |
14,596 |
|
|
$ |
95,026 |
|
|
$ |
14,779 |
|
|
GAAP diluted shares |
|
655,721 |
|
|
|
595,607 |
|
|
|
648,143 |
|
|
|
587,760 |
|
|
Dilutive equity awards (1) |
|
40,147 |
|
|
|
78,936 |
|
|
|
43,636 |
|
|
|
95,362 |
|
|
Non-GAAP diluted shares |
|
695,868 |
|
|
|
674,543 |
|
|
|
691,779 |
|
|
|
683,122 |
|
|
Non-GAAP diluted net income per share |
$ |
0.07 |
|
|
$ |
0.02 |
|
|
$ |
0.14 |
|
|
$ |
0.02 |
|
|
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(136,663 |
) |
|
$ |
(144,642 |
) |
|
$ |
(299,105 |
) |
|
$ |
(277,004 |
) |
|
Stock-based compensation expense |
|
175,143 |
|
|
|
158,411 |
|
|
|
357,948 |
|
|
|
284,780 |
|
|
Depreciation and amortization expense |
|
76,049 |
|
|
|
45,631 |
|
|
|
143,913 |
|
|
|
85,582 |
|
|
Interest and other expense, net |
|
25,132 |
|
|
|
330 |
|
|
|
40,326 |
|
|
|
2,099 |
|
|
Benefit from income taxes |
|
(19,473 |
) |
|
|
(5,599 |
) |
|
|
(18,841 |
) |
|
|
(4,377 |
) |
|
Adjusted EBITDA |
$ |
120,188 |
|
|
$ |
54,131 |
|
|
$ |
224,241 |
|
|
$ |
91,080 |
|
|
Stock-based compensation expense by function: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue |
$ |
10,486 |
|
|
$ |
13,869 |
|
|
$ |
23,372 |
|
|
$ |
23,700 |
|
|
Research and development |
|
103,121 |
|
|
|
92,493 |
|
|
|
206,157 |
|
|
|
170,811 |
|
|
Sales and marketing |
|
39,607 |
|
|
|
37,547 |
|
|
|
82,265 |
|
|
|
65,348 |
|
|
General and administrative |
|
21,929 |
|
|
|
14,502 |
|
|
|
46,154 |
|
|
|
24,921 |
|
|
Total stock-based compensation expense |
$ |
175,143 |
|
|
$ |
158,411 |
|
|
$ |
357,948 |
|
|
$ |
284,780 |
|
|
Amortization of acquired intangible assets by function: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue |
$ |
10,345 |
|
|
$ |
5,754 |
|
|
$ |
18,546 |
|
|
$ |
9,894 |
|
|
Research and development |
|
64 |
|
|
|
140 |
|
|
|
128 |
|
|
|
280 |
|
|
Sales and marketing |
|
3,556 |
|
|
|
2,205 |
|
|
|
6,086 |
|
|
|
4,101 |
|
|
General and administrative |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Total amortization of acquired intangible assets |
$ |
13,965 |
|
|
$ |
8,099 |
|
|
$ |
24,760 |
|
|
$ |
14,275 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Gives effect to potential common stock instruments such as stock options, RSUs, unvested restricted stock and warrant. There is no dilutive effect of the notes nor the related hedge and warrant transactions. |
9
|
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, |
|
||||||||||
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
||||
|
Revenue and advertising revenue excluding foreign exchange effect: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
502 |
|
|
$ |
312 |
|
|
$ |
938 |
|
|
$ |
563 |
|
|
Foreign exchange effect on 2015 revenue using 2014 rates |
|
23 |
|
|
|
|
|
|
|
38 |
|
|
|
|
|
|
Revenue excluding foreign exchange effect |
$ |
525 |
|
|
|
|
|
|
$ |
976 |
|
|
|
|
|
|
Revenue year-over-year change percent |
|
61 |
% |
|
|
|
|
|
|
67 |
% |
|
|
|
|
|
Revenue excluding foreign exchange effect year-over-year change percent |
|
68 |
% |
|
|
|
|
|
|
74 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advertising revenue |
$ |
452 |
|
|
$ |
277 |
|
|
$ |
840 |
|
|
$ |
503 |
|
|
Foreign exchange effect on 2015 advertising revenue using 2014 rates |
|
23 |
|
|
|
|
|
|
|
38 |
|
|
|
|
|
|
Advertising revenue excluding foreign exchange effect |
$ |
475 |
|
|
|
|
|
|
$ |
878 |
|
|
|
|
|
|
Advertising revenue year-over-year change percent |
|
63 |
% |
|
|
|
|
|
|
67 |
% |
|
|
|
|
|
Advertising revenue excluding foreign exchange effect year-over-year change percent |
|
71 |
% |
|
|
|
|
|
|
75 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10