Twitter, Inc.
TWITTER, INC. (Form: 8-K, Received: 02/05/2015 16:06:50)

 

 

 

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)

February 5, 2015

 

Twitter, Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

001-36164

 

20-8913779

(State or other jurisdiction of
incorporation)

 

(Commission File Number)

 

(IRS Employer
Identification No.)

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 February 5, 2015, Twitter, Inc. (the “Company”) issued a press release announcing its financial results for the quarter and fiscal year ended December 31, 2014. In the press release, the Company also announced that it would be holding a conference call on February 5, 2015 to discuss its financial results for the quarter and fiscal year ended December 31, 2014. 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 February 5, 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.

 

By:

 

 

/s/ Vijaya Gadde

 

 

Vijaya Gadde

 

 

General Counsel & Secretary

Date: February 5, 2015

 

 

 

 


 

EXHIBIT INDEX

 

Exhibit Number

  

Description

 

 

99.1

  

 

Press release issued by Twitter, Inc. dated February 5, 2015.

 

 

 

Exhibit 99.1

Twitter Reports Fourth Quarter and Fiscal Year 2014 Results

SAN FRANCISCO, Calif. – February 5, 2015 – Twitter, Inc. (NYSE: TWTR) today announced financial results for the quarter and fiscal year ended December 31, 2014.

·

Q4 revenue of $479 million, up 97% year-over-year

·

Q4 net loss of $125 million and non-GAAP net income of $79 million

·

Q4 GAAP EPS of ($0.20) and non-GAAP EPS of $0.12

·

Q4 adjusted EBITDA of $141 million, representing an adjusted EBITDA margin of 30%

·

2014 revenue of $1,403 million, up 111% year-over-year

·

2014 net loss of $578 million and non-GAAP net income of $101 million

·

2014 GAAP EPS of ($0.96) and non-GAAP EPS of $0.14

·

2014 adjusted EBITDA of $301 million, representing an adjusted EBITDA margin of 21%

“We closed out the year with our business advancing at a great pace. Revenue growth accelerated again for the full year, and we had record quarterly profits on an adjusted EBITDA basis,” said Dick Costolo, CEO of Twitter. “In addition, the trend thus far in Q1 leads us to believe that the absolute number of net users added in Q1 will be similar to what we saw during the first three quarters of 2014.”

Fourth Quarter and Fiscal 2014

Financial Summary

(In thousands, except per share data)

 

 

Three Months Ended

 

 

Year Ended

 

 

December 31,

 

 

December 31,

 

 

2014

 

 

2013

 

 

2014

 

 

2013

 

GAAP Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

$

479,078

 

 

$

242,675

 

 

$

1,403,002

 

 

$

664,890

 

Net loss

$

(125,352

)

 

$

(511,471

)

 

$

(577,820

)

 

$

(645,323

)

Diluted net loss per share

$

(0.20

)

 

$

(1.41

)

 

$

(0.96

)

 

$

(3.41

)

Non-GAAP Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

$

141,490

 

 

$

44,745

 

 

$

300,896

 

 

$

75,430

 

Non-GAAP net income (loss)

$

79,320

 

 

$

9,774

 

 

$

101,071

 

 

$

(34,330

)

Non-GAAP diluted net income (loss) per share

$

0.12

 

 

$

0.02

 

 

$

0.14

 

 

$

(0.18

)

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.

Fourth Quarter 2014 Operational Highlights

·

Average Monthly Active Users (MAUs) were 288 million for the fourth quarter, an increase of 20% year-over-year, which reflects a loss of approximately 4 million net Monthly Active Users in the fourth quarter due to changes in third party integrations.

·

Average Mobile MAUs represented approximately 80% of total MAUs.

·

Timeline views reached 182 billion for the fourth quarter of 2014, an increase of 23% year-over-year.

·

Advertising revenue per thousand timeline views reached $2.37 in the fourth quarter of 2014, an increase of 60% year-over-year.

 


 

Fourth Quarter 2014 Product Highlights

·

Users: Twitter launched the ability for people to share a Tweet privately through a Direct Message, making it easier for people to have private discussions around public content. Twitter also launched the Audio Card, which lets people discover and listen to audio directly in their timeline on Android and iOS devices.

·

Advertisers: Twitter began testing Twitter Offers in the United States, enabling advertisers to create credit card-linked promotions and share them directly with people on Twitter. Twitter also launched tailored audiences for mobile apps, a new way for advertisers to create targetable audience segments based on mobile app actions such as installs, purchases, or sign-ups. Finally, Twitter launched two new mobile targeting options including the ability to target by mobile carrier and the ability to target users with new mobile devices .

·

International Expansion: Twitter continued the international expansion of advertising offerings to 13 additional markets worldwide. Twitter’s self serve ad products expanded to 8 new markets in Q4 and now serve marketers in 28 countries.  

·

Developers: Twitter held its first mobile developer conference, Flight, where it unveiled Fabric, a single modular Software Developer Kit consisting of app stability and analytics tools through Crashlytics, monetization offerings through MoPub, identity and sign-in services through Twitter and a first-of-its-kind offering called Digits, and content distribution and syndication through an improved Twitter SDK .

·

January Launches: In January, Twitter launched a recap feature, marked with a “While you were away” heading, that surfaces at the top of the Timeline some of the best Tweets people may have missed from accounts people follow; group Direct Messaging, which lets people expand private conversations from one other participant to as many as 20, and new video functionality that allows people to capture, edit and share videos right from within the Twitter app.

Fourth Quarter 2014 Financial Highlights

Revenue – Revenue for the fourth quarter of 2014 totaled $479 million, an increase of 97% compared to $243 million in the same period in 2013.

·

Advertising revenue totaled $432 million, an increase of 97% year-over-year.

·

Mobile advertising revenue was 88% of total advertising revenue.

·

Data licensing and other revenue totaled $47 million, an increase of 105% year-over-year.

·

International revenue totaled $164 million, an increase of 149% year-over-year.  

·

International revenue was 34% of total revenue.

Net loss – GAAP net loss was $125 million for the fourth quarter of 2014 compared to a GAAP net loss of $511 million in the same period in 2013. GAAP net loss for the fourth quarter of 2014 included $ 177 million of stock-based compensation expense.

Adjusted EBITDA – Adjusted EBITDA was $141 million for the fourth quarter of 2014, an increase of 216% compared to $45 million in the same period in 2013.

Non-GAAP net income – Non-GAAP net income was $79 million for the fourth quarter of 2014, an increase of 712% compared to $10 million in the same period in 2013.

EPS – Basic and diluted GAAP EPS was ($0.20) for the fourth quarter of 2014 compared to ($1.41) in the same period in 2013.

Non-GAAP EPS – Non-GAAP EPS was $0.12 for the fourth quarter of 2014 compared to $0.02 in the same period in 2013.

Capital expenditures – Purchases of property and equipment for the fourth quarter of 2014 were $69 million. Additionally, $30 million of equipment was financed through capital leases during the fourth quarter of 2014.

Cash, cash equivalents and marketable securities – As of December 31, 2014, cash, cash equivalents and marketable securities were approximately $3.6 billion, compared to $3.6 billion as of September 30, 2014.

2


 

Outlook

Twitter’s outlook for the first quarter of 2015 is as follows:

·

Revenue is projected to be in the range of $440 million to $450 million.

·

Adjusted EBITDA is projected to be in the range of $89 million to $94 million.

·

Stock-based compensation expense is projected to be in the range of $160 million to $170 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 $2.3 billion to $2.35 billion.

·

Adjusted EBITDA is projected to be in the range of $550 million to $575 million.

·

Capital expenditures are projected to be in the range of $500 million to $650 million.

·

Stock-based compensation expense is projected to be in the range of $700 million to $750 million, excluding the impact of equity awards that may be granted in connection with potential future acquisitions.

Note that Twitter’s outlook for the first quarter and full year of 2015 reflects foreign exchange rates as of January 31, 2015.

Webcast and Conference Call Details

Twitter will host a conference call today, Thursday, February 5, 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 (@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  Twitter.com , via the Twitter mobile application and via text message . Available in more than 35 languages, Twitter has 288 million monthly active users. For more information, visit discover.twitter.com 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 and Twitter’s expectations regarding its MAUs, revenue, adjusted EBITDA, capital expenditures and stock-based compensation expense for the first 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; 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 Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 filed with the Securities and Exchange Commission. Additional information will also be set forth in Twitter’s Annual Report on Form 10-K for the year ended December 31, 2014. 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.

3


 

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 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 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.

Contacts

Investors:  

Dave Rivinus

ir@twitter.com

Press: 

Jim Prosser

jprosser@twitter.com

 

 

 

4


 

 

TWITTER, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

 

December 31,

 

 

December 31,

 

 

2014

 

 

2013

 

Assets

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

$

1,510,724

 

 

$

841,010

 

Short-term investments

 

2,111,154

 

 

 

1,393,044

 

Accounts receivable, net

 

418,454

 

 

 

247,328

 

Prepaid expenses and other current assets

 

215,521

 

 

 

93,297

 

Total current assets

 

4,255,853

 

 

 

2,574,679

 

Property and equipment, net

 

557,019

 

 

 

332,662

 

Intangible assets

 

105,011

 

 

 

77,627

 

Goodwill

 

622,570

 

 

 

363,477

 

Other assets

 

42,629

 

 

 

17,795

 

Total assets

$

5,583,082

 

 

$

3,366,240

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

$

53,241

 

 

$

27,994

 

Accrued and other current liabilities

 

228,233

 

 

 

110,310

 

Capital leases, short-term

 

112,320

 

 

 

87,126

 

Total current liabilities

 

393,794

 

 

 

225,430

 

Convertible notes

 

1,376,020

 

 

 

 

Capital leases, long-term

 

118,950

 

 

 

110,520

 

Deferred and other long-term tax liabilities, net

 

24,706

 

 

 

59,500

 

Other long-term liabilities

 

43,209

 

 

 

20,784

 

Total liabilities

 

1,956,679

 

 

 

416,234

 

Stockholders’ equity:

 

 

 

 

 

 

 

Common stock

 

3

 

 

 

3

 

Additional paid-in capital

 

5,208,870

 

 

 

3,944,952

 

Accumulated other comprehensive loss

 

(10,024

)

 

 

(323

)

Accumulated deficit

 

(1,572,446

)

 

 

(994,626

)

Total stockholders’ equity

 

3,626,403

 

 

 

2,950,006

 

Total liabilities and stockholders’ equity

$

5,583,082

 

 

$

3,366,240

 

 

 

 

5


 

TWITTER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

 

 

Three Months Ended

 

 

Year Ended

 

 

December 31,

 

 

December 31,

 

 

2014

 

 

2013

 

 

2014

 

 

2013

 

Revenue

$

479,078

 

 

$

242,675

 

 

$

1,403,002

 

 

$

664,890

 

Costs and expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

136,613

 

 

 

112,651

 

 

 

446,309

 

 

 

266,718

 

Research and development

 

181,715

 

 

 

394,848

 

 

 

691,543

 

 

 

593,992

 

Sales and marketing

 

203,599

 

 

 

177,305

 

 

 

614,110

 

 

 

316,216

 

General and administrative

 

55,304

 

 

 

67,547

 

 

 

189,906

 

 

 

123,795

 

Total costs and expenses

 

577,231

 

 

 

752,351

 

 

 

1,941,868

 

 

 

1,300,721

 

Loss from operations

 

(98,153

)

 

 

(509,676

)

 

 

(538,866

)

 

 

(635,831

)

Interest income (expense), net

 

(23,513

)

 

 

(2,387

)

 

 

(33,985

)

 

 

(6,860

)

Other income (expense), net

 

1

 

 

 

(2,725

)

 

 

(5,500

)

 

 

(4,455

)

Loss before income taxes

 

(121,665

)

 

 

(514,788

)

 

 

(578,351

)

 

 

(647,146

)

Provision (benefit) for income taxes

 

3,687

 

 

 

(3,317

)

 

 

(531

)

 

 

(1,823

)

Net loss

$

(125,352

)

 

$

(511,471

)

 

$

(577,820

)

 

$

(645,323

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

$

(0.20

)

 

$

(1.41

)

 

$

(0.96

)

 

$

(3.41

)

Weighted-average shares used to

   compute net loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

629,310

 

 

 

362,624

 

 

 

604,990

 

 

 

189,510

 

 

 

 

6


 

TWITTER, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(In thousands)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

December 31,

 

 

Year Ended

December 31,

 

 

2014

 

 

2013

 

 

2014

 

 

2013

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(125,352

)

 

$

(511,471

)

 

$

(577,820

)

 

$

(645,323

)

Adjustments to reconcile net loss to net cash provided by

   (used in) operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

62,428

 

 

 

33,224

 

 

 

208,165

 

 

 

110,894

 

Stock-based compensation expense

 

177,215

 

 

 

521,197

 

 

 

631,597

 

 

 

600,367

 

Amortization of discount on convertible notes

 

16,412

 

 

 

 

 

 

18,823

 

 

 

 

Provision for bad debt

 

1,688

 

 

 

799

 

 

 

4,632

 

 

 

1,557

 

Deferred income tax benefit

 

128

 

 

 

(8,410

)

 

 

(9,609

)

 

 

(8,902

)

Non-cash acquisition-related costs

 

 

 

 

138

 

 

 

320

 

 

 

704

 

Amortization of investment premium and other

 

(1,757

)

 

 

1,333

 

 

 

7,663

 

 

 

3,457

 

Changes in assets and liabilities, net of assets acquired

   and liabilities assumed from acquisitions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

(99,750

)

 

 

(77,798

)

 

 

(177,583

)

 

 

(112,060

)

Prepaid expenses and other assets

 

(24,685

)

 

 

(9,635

)

 

 

(165,395

)

 

 

(12,045

)

Accounts payable

 

12,761

 

 

 

16,249

 

 

 

18,059

 

 

 

7,957

 

Accrued and other liabilities

 

24,230

 

 

 

31,506

 

 

 

122,944

 

 

 

54,792

 

Net cash provided by (used in) operating activities

 

43,318

 

 

 

(2,868

)

 

 

81,796

 

 

 

1,398

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

(68,791

)

 

 

(29,116

)

 

 

(201,630

)

 

 

(75,744

)

Purchases of marketable securities

 

(1,319,618

)

 

 

(1,291,915

)

 

 

(2,937,033

)

 

 

(1,573,489

)

Proceeds from maturities of marketable securities

 

506,936

 

 

 

55,103

 

 

 

2,029,518

 

 

 

355,270

 

Proceeds from sales of marketable securities

 

19,924

 

 

 

8,051

 

 

 

188,092

 

 

 

42,816

 

Restricted cash

 

(13

)

 

 

(3,306

)

 

 

(11,042

)

 

 

(10,847

)

Business combinations, net of cash acquired and

   purchases of intangible assets

 

 

 

 

(36,000

)

 

 

(165,177

)

 

 

(44,072

)

Net cash used in investing activities

 

(861,562

)

 

 

(1,297,183

)

 

 

(1,097,272

)

 

 

(1,306,066

)

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net proceeds from issuance of common stock

 

 

 

 

2,019,704

 

 

 

 

 

 

2,018,579

 

Proceeds from issuance of convertible notes

 

89,000

 

 

 

 

 

 

1,889,000

 

 

 

 

Convertible notes initial issuance discount

 

(1,335

)

 

 

 

 

 

(28,810

)

 

 

 

Purchases of convertible note hedges

 

(19,719

)

 

 

 

 

 

(407,169

)

 

 

 

Proceeds from issuance of warrants

 

14,142

 

 

 

 

 

 

289,272

 

 

 

 

Taxes paid related to net share settlement of equity awards

 

(885

)

 

 

(14,637

)

 

 

(17,053

)

 

 

(14,637

)

Repayments of capital lease obligations

 

(28,059

)

 

 

(21,203

)

 

 

(103,135

)

 

 

(70,445

)

Proceeds from exercise of stock options, net of repurchase

 

3,631

 

 

 

1,742

 

 

 

28,658

 

 

 

8,679

 

Proceeds from issuances of common stock under

   employee stock purchase plan

 

21,178

 

 

 

 

 

 

42,402

 

 

 

 

Other financing activities

 

1,219

 

 

 

 

 

 

(1,443

)

 

 

 

Net cash provided by financing activities

 

79,172

 

 

 

1,985,606

 

 

 

1,691,722

 

 

 

1,942,176

 

Net increase (decrease) in cash and cash equivalents

 

(739,072

)

 

 

685,555

 

 

 

676,246

 

 

 

637,508

 

Foreign exchange effect on cash and cash equivalents

 

(2,999

)

 

 

(249

)

 

 

(6,532

)

 

 

174

 

Cash and cash equivalents at beginning of period

 

2,252,795

 

 

 

155,704

 

 

 

841,010

 

 

 

203,328

 

Cash and cash equivalents at end of period

$

1,510,724

 

 

$

841,010

 

 

$

1,510,724

 

 

$

841,010

 

Supplemental disclosures of non-cash investing and financing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Conversion of preferred stock to common stock

$

 

 

$

872,536

 

 

$

 

 

$

872,536

 

Common and convertible preferred stock issued in connection

   with acquisitions

$

 

 

$

218,821

 

 

$

147,958

 

 

$

331,766

 

Equipment purchases under capital leases

$

30,276

 

 

$

60,222

 

 

$

140,685

 

 

$

155,722

 

Changes in accrued equipment purchases

$

(7,783

)

 

$

(18,124

)

 

$

6,562

 

 

$

(1,602

)

Unpaid deferred offering costs

$

 

 

$

1,162

 

 

$

 

 

$

1,162

 


7


 

TWITTER, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(In thousands, except per share data)

(Unaudited)

 

 

Three Months Ended

 

 

Year Ended

 

 

December 31,

 

 

December 31,

 

 

2014

 

 

2013

 

 

2014

 

 

2013

 

Non-GAAP net income (loss) and net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(125,352

)

 

$

(511,471

)

 

$

(577,820

)

 

$

(645,323

)

Stock-based compensation expense

 

177,215

 

 

 

521,197

 

 

 

631,597

 

 

 

600,367

 

Amortization of acquired intangible assets

 

10,419

 

 

 

5,569

 

 

 

36,563

 

 

 

16,530

 

Non-cash interest expense related to convertible notes

 

16,412

 

 

 

 

 

 

18,823

 

 

 

 

Income tax effects related to acquisitions

 

626

 

 

 

(5,521

)

 

 

(8,092

)

 

 

(5,904

)

Non-GAAP net income (loss)

$

79,320

 

 

$

9,774

 

 

$

101,071

 

 

$

(34,330

)

GAAP diluted shares

 

629,310

 

 

 

362,624

 

 

 

604,990

 

 

 

189,510

 

Diluted effect of preferred stock conversion (1)

 

 

 

 

155,687

 

 

 

 

 

 

 

Other dilutive equity awards (2)

 

54,096

 

 

 

93,900

 

 

 

104,497

 

 

 

 

Non-GAAP diluted shares

 

683,406

 

 

 

612,211

 

 

 

709,487

 

 

 

189,510

 

Non-GAAP diluted net income (loss) per share

$

0.12

 

 

$

0.02

 

 

$

0.14

 

 

$

(0.18

)

Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(125,352

)

 

$

(511,471

)

 

$

(577,820

)

 

$

(645,323

)

Stock-based compensation expense

 

177,215

 

 

 

521,197

 

 

 

631,597

 

 

 

600,367

 

Depreciation and amortization expense

 

62,428

 

 

 

33,224

 

 

 

208,165

 

 

 

110,894

 

Interest and other expense, net

 

23,512

 

 

 

5,112

 

 

 

39,485

 

 

 

11,315

 

Provision (benefit) for income taxes

 

3,687

 

 

 

(3,317

)

 

 

(531

)

 

 

(1,823

)

Adjusted EBITDA

$

141,490

 

 

$

44,745

 

 

$

300,896

 

 

$

75,430

 

Stock-based compensation expense by function:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

$

13,240

 

 

$

45,927

 

 

$

50,536

 

 

$

50,942

 

Research and development

 

95,942

 

 

 

326,536

 

 

 

360,726

 

 

 

379,913

 

Sales and marketing

 

49,031

 

 

 

104,084

 

 

 

157,263

 

 

 

114,440

 

General and administrative

 

19,002

 

 

 

44,650

 

 

 

63,072

 

 

 

55,072

 

Total stock-based compensation expense

$

177,215

 

 

$

521,197

 

 

$

631,597

 

 

$

600,367

 

Amortization of acquired intangible assets by function:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

$

7,524

 

 

$

3,923

 

 

$

26,273

 

 

$

14,884

 

Research and development

 

365

 

 

 

300

 

 

 

1,157

 

 

 

300

 

Sales and marketing

 

2,530

 

 

 

1,346

 

 

 

9,133

 

 

 

1,346

 

General and administrative

 

 

 

 

 

 

 

 

 

 

 

Total amortization of acquired intangible assets

$

10,419

 

 

$

5,569

 

 

$

36,563

 

 

$

16,530

 

 

(1)

Gives effect to the conversion of convertible preferred stock into common stock as though the conversion had occurred at the beginning of the period under the “if-converted” method.

(2 )

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 of the related hedge and warrant transactions.

8