Twitter, Inc.
Apr 28, 2015

Twitter Reports First Quarter 2015 Results; Lowers Full-Year 2015 Expectations

SAN FRANCISCO, Calif. - April 28, 2015 - Twitter, Inc. (NYSE: TWTR) today announced financial results for the quarter ended March 31, 2015, and outlined lower 2015 expectations.

Twitter's first quarter revenues were affected by a lower-than-expected contribution from its newer direct response products. The Company expects this revenue impact to continue for the remainder of the fiscal year as outlined in the outlook section below.

"While we exceeded our EBITDA target for the first quarter, revenue growth fell slightly short of our expectations due to lower-than-expected contribution from some of our newer direct response products," said Dick Costolo, CEO of Twitter. "It is still early days for these products, and we have a strong pipeline that we believe will drive increased value for direct response advertisers in the future. We remain confident in our strategy and in Twitter's long-term opportunity, and our focus remains on creating sustainable shareholder value by executing against our three priorities: strengthening the core, reducing barriers to consumption and delivering new apps and services."

In addition, Twitter made two announcements today aimed at strengthening its direct response capabilities:

For 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.

First Quarter 2015 Operational and Product Highlights

Monthly Active Users - Average Monthly Active Users (MAUs) were 302 million for the first quarter, up 18% year-over-year and compared to 288 million in the previous quarter. Average Mobile MAUs represented approximately 80% of total MAUs.

Consumer Products - Twitter launched new native video functionality that allows people to capture, edit and share videos right from within the Twitter app. Other consumer product releases included a recap feature, marked with a "While you were away" heading, that surfaces at the top of the Timeline with some of the best Tweets people may have missed from accounts they follow; Instant Timelines, which provide new users with a personalized timeline of Tweets right from sign-up; and group Direct Messaging, which lets people expand private conversations from one other participant to as many as 30.

Advertising Products -Twitter added a new analytics homepage and a quick promote feature to make it easier for small and medium-sized businesses (SMBs) to get their best content in front of more potential customers. Other new advertising products included targeting through more than 1,000 partner audiences and enhanced conversion tracking for performance marketers on web.

Partnerships - Twitter announced ad syndication deals with Flipboard and Yahoo Japan to extend the reach of Promoted Tweets to a larger audience on these third-party properties. Twitter also announced a partnership with Google to make Twitter content easier to find through real-time searches.

Developers - Twitter's mobile developer conference, Flight, kicked off its world tour with events held in 17 cities across the U.S. and Europe. In addition, Twitter introduced several updates to the Digits module within its world-class Fabric software developer kit, which include a sign-up for web, friend-finding features, and 2-step verification to give users added security when logging in.

Acquired Companies - Twitter acquired Periscope, a new app that lets users stream and experience live video from their mobile phones, and Niche, a provider of software, community and monetization services for creative content creators. Twitter also announced it agreed to acquire ZipDial, a mobile platform that combines SMS, voice, mobile web and access to mobile apps to bridge users from offline to online.

First Quarter 2015 Financial Highlights

Revenue - Revenue for the first quarter of 2015 totaled $436 million, an increase of 74% compared to $250 million in the same period in 2014. Excluding the impact of year-over-year changes in foreign exchange rates, total revenue would have increased 80%.

Net loss - GAAP net loss was $162 million for the first quarter of 2015 compared to $132 million in the same period in 2014. GAAP net loss for the first quarter of 2015 included $183 million of stock-based compensation expense.

Adjusted EBITDA - Adjusted EBITDA was $104 million for the first quarter of 2015, an increase of 182% compared to $37 million in the same period in 2014.

Non-GAAP net income - Non-GAAP net income was $47 million for the first quarter of 2015 compared to $0.2 million in the same period in 2014.

EPS - Basic and diluted GAAP EPS was ($0.25) for the first quarter of 2015 compared to ($0.23) in the same period in 2014.

Non-GAAP diluted EPS - Non-GAAP diluted EPS was $0.07 for the first quarter of 2015 compared to $0.00 in the same period in 2014.

Capital expenditures - Purchases of property and equipment for the first quarter of 2015 were $68 million. Additionally, $5 million of equipment purchases were financed through capital leases during the first quarter of 2015.

Cash, cash equivalents and marketable securities - As of March 31, 2015, cash, cash equivalents, and marketable securities were approximately $3.6 billion, compared to $3.6 billion as of December 31, 2014.


Twitter's outlook for the second quarter of 2015 is as follows:

Twitter's outlook for the full year of 2015 is as follows:

Note that Twitter's outlook for the second quarter and full year of 2015 reflects foreign exchange rates as of April 15, 2015 and the impact expected from Twitter's acquisition of TellApart, which is expected to close on or around June 1, 2015. The TellApart acquisition is subject to various closing conditions, including regulatory review, and there is no guarantee the transaction will close by June 1, 2015.

Webcast and Conference Call Details
Twitter will host a conference call today, Tuesday, April 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 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 (, as well as certain Twitter accounts (@dickc, @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 create, distribute and discover content, we have democratized content creation and distribution, enabling any voice to echo around the world instantly and unfiltered. The service can be accessed at, via the Twitter mobile application and via text message. Available in more than 35 languages, Twitter has 302 million monthly active users. For more information, visit or follow @twitter.

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," "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 revenue contributions from new direct response products, Twitter's expectations regarding its MAUs, revenue, adjusted EBITDA, capital expenditures and stock-based compensation expense for the second quarter and full year 2015, the expected completion of the TellApart acquisition, the time frame in which the acquisition will occur and the expected impact of the TellApart acquisition. 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 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 filed with the Securities and Exchange Commission on March 2, 2015. Additional information will also be set forth in Twitter's Quarterly Report on Form 10-Q for the quarter ended March 31, 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 and advertising revenue excluding foreign exchange effect, adjusted EBITDA, non-GAAP net income (loss), adjusted EBITDA margin and non-GAAP EPS. Twitter defines adjusted EBITDA as net loss adjusted to exclude stock-based compensation expense, depreciation and amortization expense, interest and other expenses 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 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 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 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 EPS. Twitter also believes that adjusted EBITDA, non-GAAP net income (loss), adjusted EBITDA margin and non-GAAP 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 for the three months ended March 31, 2015 using the prior year's monthly exchange rates for our settlement currencies other than the U.S. dollar, which Twitter believes is a useful metric that facilitates comparison to our 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.

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 and provision (benefit) for income taxes, that are expected to be incurred in the future.


Dave Rivinus

Jim Prosser