WebProNews

Tag: Dick Costolo

  • Is Dorsey’s Role As Twitter CEO Really Just Interim?

    Is Dorsey’s Role As Twitter CEO Really Just Interim?

    On Thursday, Twitter announced that CEO Disk Costolo is stepping down on July 1, and that co-founder Jack Dorsey will step in as interim CEO as the board of directors conducts a search for a permanent replacement. The way in which Dorsey answered questions following the announcement, however, leaves some room for speculation about just how interim his position will actually be.

    For starters, he wouldn’t just come out and say that he will not be the permanent CEO.

    Business Insider asked Costolo if bringing in someone new would put a lot of pressure, stress, and shakeups to the Twitter team. Costolo replied that this would be true if someone from the outside were to step in, “but we have the benefit of Jack being chairman of the board, the inventor of the product, and a cofounder. He’s already a visible leader within the company, he speaks to the company and in company events both in the US and abroad with some frequency. There’s no one better than him to lead the company through a transition like that. He’s close to my entire leadership team.”

    Business Insider asked Dorsey flat out if the “interim” is just a thing to hold us or if he’s really just interim. Here’s what Dorsey reportedly said:

    “My focus is on interim, and my focus is on making sure we continue our momentum around all of our products and initiatives. And that we continue our pace of delivery and facilitating a smooth transition as the board conducts a search for a permanent CEO. We do have a search committee comprised of Peter Currie, Peter Fenton, and our cofounder Evan Williams, and we’re going to take the time to pick and choose the right CEO for the company. I’m not focused on that question at all. I’m focused on making sure we continue our momentum and to amplify what we’re doing.”

    Asked even more directly if he wants to be permanent CEO, Dorsey responded:

    Again, I’m not going to answer that because it’s not my focus, it’s not what I’m thinking about; I have enough to focus on.

    Similarly, he sidestepped the question from the Wall Street Journal about whether he would consider staying on permanently:

    “It’s not my decision,” he said in an interview. “As Dick mentioned, we have a search committee running and they’re just starting their process and it’s not even something I’m thinking about. Again, I’m focused on making sure that Twitter is the most successful it can be and that Square is the most successful it can be.”

    When pressed further on what he would do if the job were offered to him, he declined to comment. “I’m not going to answer that question because it’s not what I’m focused on,” said Dorsey, who is also the chairman of Twitter’s board.

    Dorsey said he already spends his time at both Twitter and Square, which are located on the same block in San Francisco. But if he were to take over as full-time CEO of Twitter, he would likely need to relinquish his role at Square.

    Dorsey did mention Square in the official Twitter announcement:

    “I am grateful for the talented team at Square, which I will continue to lead,” he added. “We have built a very strong company from top to bottom, and I am as committed as ever to its continued success.”

    It’s hard to imagine that anybody is more qualified for the Twitter CEO role than Dorsey, which is no doubt why he’s stepping in for the interim. Until either Twitter finds another suitable replacement or Dorsey flat out says he doesn’t want the job, I expect he’ll be considered the frontrunner (at least by the media) for the foreseeable future.

    Dorsey was, of course, Twitter’s original CEO.

    Image via Wikimedia Commons

  • Dick Costolo Is Stepping Down As Twitter CEO

    Dick Costolo Is Stepping Down As Twitter CEO

    Well, I suppose it was only a matter of time. People have been calling for his ouster for quite a while, but the other top brass at Twitter has always had his back. Either way, Twitter just announced that Dick Costolo will step down as CEO on July 1.

    Costolo will remain on the company’s board of directors, and co-founder Jack Dorsey will fill in as interim CEO while the board looks for a permanent replacement. Dorsey will also remain CEO of Square.

    The board has formed a search committee, which is chaired by its Lead Independent Director, Peter Currie, and includes Peter Fenton and co-founder Evan Williams. The company said the committee will retain a leading executive search firm to assist in its efforts. They’re looking both inside and outside of the company.

    “I am tremendously proud of the Twitter team and all that the team has accomplished together during my six years with the company,” Costolo said. “We have great leaders who work well together and a clear strategy that informs our objectives and priorities. There is no one better than Jack Dorsey to lead Twitter during this transition. He has a profound understanding of the product and Twitter’s mission in the world as well as a great relationship with Twitter’s leadership team. I am deeply appreciative of the confidence the Board, the management team and the employees have placed in me over the years, and I look forward to supporting Twitter however I can going forward.”

    “The future belongs to Twitter thanks in large part to Dick Costolo’s dedication and vision,” said Dorsey. “Dick has put a world-class team in place and created a great foundation from which Twitter can continue to change the world and grow. We have an exciting lineup of products and initiatives coming to market, and I look forward to continuing to execute our strategy while helping facilitate a smooth transition as the Board conducts its search.”

    “I am grateful for the talented team at Square, which I will continue to lead,” he added. “We have built a very strong company from top to bottom, and I am as committed as ever to its continued success.”

    Was there any doubt about that one?

    Currie said, “On behalf of the Board, I want to thank Dick for his years of tireless devotion to building Twitter into the strong and dynamic company it is today, putting us in a superb position for continued growth and innovation for many years to come. We look forward to his continued contributions during the transition period and as an ongoing member of the Board. The Board is fully committed to running a thorough process to identify the right CEO to lead Twitter into its next phase of growth. In the meantime, we are fortunate to have Jack – one of our founders – step back into a management role and help lead Twitter as we continue on our strategic priorities.”

    Costolo has been on the hot seat since the company web public, as Twitter’s user growth just hasn’t managed to be strong enough for investors. The company has been focusing on trying to change that, but ultimately, it’s going to be up to someone else going forward.

    Cue the blogosphere’s suggestions for Costolo’s replacement. Who would you like to see take over?

    Image via Wikimedia Commons

  • Google’s Twitter Update Is About To Hit

    Google’s Twitter Update Is About To Hit

    Long story short, what you say and what others say about you on Twitter may start mattering a lot more.

    Do you expect to benefit from Google’s coming Twitter integration? Let us know in the comments.

    We learned in February that Google and Twitter struck a new deal that will see Google indexing tweets in real time. Initial reports indicated that tweets would become visible in Google’s search results as soon as they’re posted, starting in the first half of this year. Now, we’ve got a more specific timeframe.

    In a conference call to discuss Twitter’s earnings, CEO Dick Costolo revealed that the integration will begin its roll-out next month. Given that April is just about over, that could potentially be as early as this week.

    “I don’t have a specific date for you, but now I can at least give you a specific month,” said Costolo. “And that Google deal is all about…that relationship is about driving our total audience strategy. The goal is that people consume content and engage with that content whether they log in or not.”

    Twitter Needs More Eyeballs

    Since going public in 2013, Twitter has faced immense pressure to grow its user base, and that growth has been quite slow. While the company did manage to add 14 million users over the last quarter, it only just surpassed its 300 million monthly active user milestone. For comparison, Facebook just reported 1.44 billion. Twitter has been exploring different ways to grow its MAUs, and much of that has been focused on improving the experience for logged out users.

    Earlier this month, Twitter launched a homepage redesign. For logged in users, the homepage remains the user’s home timeline, but for logged out users, it’s now a user-friendly directory of categorized content. Twitter has for all intents and purposes turned its logged-out homepage into a news site.

    The Google deal is another way (and likely a pretty significant one) to get people to realize more value from the service even if they’ve not been frequent users in the past. The narrative around Twitter’s stock every time the company reports its earnings is always shareholder disappointment, so the importance of the Google deal cannot be overstated from Twitter’s corporate perspective.

    The two companies, as you may know, used to have a similar relationship, but when the original deal expired, the companies were unable to reach an agreement to keep it going.

    “I would say that the way we think about the Google deal now without again — without going into any of the details distinct from the kind of relationship we had in the past is that we’ve got the opportunity now to drive a lot of attention to an aggregate eye balls if you will to these logged out experiences, topics and events that we plan on delivering on the front page of Twitter,” Costolo said on a previous earnings call ahead of the new homepage roll-out. “And that’s one of the reasons this makes a lot more sense for us now.”

    What’s in store?

    Little is known about why exactly that relationship fell apart, but the most logical explanation is that the pre-public Twitter thought it was worth more than what Google was willing to pay for access to Twitter’s firehose of realtime tweets. Google had even built a feature for its search results pages -Realtime Search – around the deal. It used to display a box of scrolling realtime results, which included tweets as well as content from other sources, on search results pages for newsy queries.

    Once the Twitter deal went away, so did the feature, making it clear that the tweets were the only real valuable part of that. This also illustrated how valuable the deal was for Google, as its absence highlighted a failure of Google’s stated mission to organize the world’s information and make it universally accessible. With so much of the world’s information now flooding the internet in real time, Google could hardly make good on that mission without the access it once had.

    Google isn’t expected to implement tweets the same way it used to when the new integration goes into effect.

    “I don’t think that this is what Google is looking for,” search marketer Eric Enge recently told WebProNews. “I suspect that the UI impact will be minimal, but that more tweets will get indexed. However (and this is a big however), what will really be interesting to see is if Google uses tweet data to help drive personalization in one fashion or another. One simple way to do this? Simply favor content that people link to from their tweets in future related search results.”

    “This type of prioritization is similar to what they do with Google+ already,” he added. “This is just speculation on my part, but I think it could be a huge win for Google if this deal gives them enough visibility to allow them to do that.”

    We’ll see if either company makes a big announcement about how Google will handle tweets or if we’ll just start seeing the tweets surface more.

    How Google has been using tweets

    Earlier this year, Enge and his firm Stone Temple Consulting released some findings about how Google indexes tweets currently, which provides some insight into how things may change when the new deal goes into effect. His team analyzed over 133,000 tweets to see how Google indexed them, and found that about 7.4% of them were actually indexed, leaving 92.6% completely left out of the search engine.

    The findings suggested that Twitter accounts with larger follower counts are getting more tweets indexed, though it may be only a correlation. Enge said he doesn’t think Google is looking specifically at follower count, but that other signals are affecting which profiles get indexed more (i.e. links to those accounts’ profiles). Either way, he noted, more value is clearly being placed on the authoritative accounts.

    Out of the accounts with over a million followers that the research looked at, there were 13,435 tweets with 21% of them being indexed by Google. Out of 44,318 tweets in the 10K to 1M follower range, only 10% were indexed. For 80,842 tweets from accounts with less than 10,000 followers, just 4% were indexed.

    Stone Temple said images and/or hashtags seem to increase a tweet’s chances of getting indexed with percentages registering higher than average. Mentions, on the other hand, register negatively. It also points to another of its studies, which showed that links from third-party sites have a significant impact.

    “Google still loves links. 26% of the tweets with an inbound link from sites other than Twitter got indexed. That is nearly 4 times as much as the overall average rate of indexation,” Enge said in the report, adding that link quantity correlates highly with a tweet getting indexed.

    They found that out of 21 accounts and 91 tweets with with over 100 inbound links, 46% were indexed. The number goes down the less inbound links there are. Those with less than ten links only saw a 7% index rate.

    “What our study showed is that Google currently places minimal impact on freshness of tweets today,” Enge told WebProNews in February. “Perhaps when crawling needs to be done to discover them it’s just not worth it, and it might be that the new deal will change that. However, I suspect that it’s not the tweets themselves that Google really values the most, but the content they link to that Google wants to discover more quickly. That said, if they see a tweet getting major engagement, chances probably would go up that this tweet will show up higher in the results.”

    Your reputation on the line?

    Businesses may have reputation-related issues to be concerned about when the deal takes effect.

    “The biggest challenge and opportunity for businesses using Twitter for customer service is that every interaction is now amplified,” Conversocial CEO Joshua March told us last month. “Whether that’s a complaint from a customer or the company’s response, the agreement between Google and Twitter places a greater spotlight on each interaction.”

    “When a customer is searching on Google for a business, Tweets from customers about issues or bad service experiences could be on the front page,” he said. “If businesses have a social first approach to customer service then they can tackle these quickly and head on, creating positive engagements that will show up instead. This deal has the potential to accelerate the kind of service-related Twitter crises many brands have already experienced.”

    The key word there is potential. Until we see Google’s approach to the integration, any of this is only speculative. However, these are important points for businesses to keep in mind as the integration approaches.

    “For companies with a social first approach who are committed to delivering excellent, fast and authentic social customer service, the agreement between Google and Twitter has the ability to spotlight them, and make it very obvious to customers that they care,” said March. “Companies that have successfully integrated various social media into their customer service DNA should be very excited by the agreement. In addition, previously addressed concerns are now searchable, allowing customers to potentially self-help.”

    Businesses are going to have to consider that any tweets related to their brands could become more visible, as could tweets from employees. In fact, even beyond the Google deal, Twitter is doing other things that could inflate visibility through search.

    This goes beyond Google

    Google already has a firehose deal in place with Bing.

    Twitter is also working with Apple. During Tuesday’s conference call, Costolo said, “And finally, we are also working with Apple to surface great Twitter content and accounts directly in Spotlight Search on iOS and OS X, that also makes it easier and quicker to find great things on Twitter. So I would sum up by saying, there is absolutely an opportunity to go and monetize that attention and traffic. We want to make sure we iterate on the experiences to get them right first.”

    Update: Apple’s spotlight search is reportedly already surfacing Twitter content.

    Twitter clearly wants (and needs) to have its content surfaced as much as possible, so look for it to find other partnerships to fuel this as well.

    The company is also experimenting with its own search interface, which could emphasize the power of that to more people as it continues to court and retain new users. We recently looked at a redesign it’s been testing, and while Twitter would not confirm that it will roll out to all users, it’s clearly an improvement from the existing interface, so I would be shocked if it doesn’t.

    There’s not much change in terms of functionality, but the way things are laid out and labeled are significantly improved, and could draw some new attention to Twitter Search. For a deeper dive into this interface, read this.

    Twitter also recently started indexing every public tweet from the last 8 years, so there’s that too.

    Are you looking forward to the Google/Twitter deal taking effect? How should Google approach the data? Discuss.

    Images via Wikimedia Commons, Twitter

  • Twitter Says It’s Tripled the Team Handling Abuse Reports

    Twitter has a big problem with abuse. Everyone knows this. The company’s CEO knows this. The management team at Twitter knows something has to be done about it. But what is Twitter going to do about all the abuse and harassment that takes place on the site?

    Incremental changes, for now.

    Twitter has just provided an update on safety features concerning abuse and harassment, claiming to be fielding many, many more abuse reports since it streamlined the reporting process late last year. On top of that, Twitter says it’s tripled the size of the team handling these abuse reports.

    “Over the last six months, in addition to the product changes, we have overhauled how we review user reports about abuse. As an example, allowing bystanders to report abuse – which can now be done for reports of private information and impersonation as well – involved not only an update to our in-product reporting process, but significant changes to our tools, processes and staffing behind the scenes. Overall, we now review five times as many user reports as we did previously, and we have tripled the size of the support team focused on handling abuse reports,” says Twitter VP of User Services Tina Bhatnagar.

    But that hasn’t fixed the problem – a problem which, at least at thus point, seems unfixable. Manageable, maybe. But you’re never going to completely protect hundreds of millions of people from abuse on the internet. You can try to mitigate it, however.

    Twitter is now streamlining the reporting of impersonation, self-harm and the sharing of private and confidential information – just like it did with harassment and abuse.

    They’re also doing something new when it comes to punishing those who break the rules.They’re making it harder to be a repeat offender.

    “We are also beginning to add several new enforcement actions for use against accounts that violate our rules. These new actions will not be visible to the vast majority of rule-abiding Twitter users – but they give us new options for acting against the accounts that don’t follow the rules and serve to discourage behavior that goes against our policies,” says Bhatnagar.

    Specifically, Twitter is going to start using phone numbers to track users who’ve been suspended for abusive behavior. Twitter may now ask for users to verify their phone number in order to reinstate their suspended account. Twitter can then check these numbers against a database of banned users. Of course, this doesn’t tackle the problem of people simply creating a new account altogether (you just need an email address for that). But it helps.

    Twitter is looking to make it hard for troll, if it can’t outright silence them. Listen to what CEO Dick Costolo had to say in a recent New York Times interview:

    “We’ve always taken [abuse] seriously. We’ve drawn a line on what constitutes harassment and abuse. I believe that we haven’t yet drawn that line to put the cost of dealing with harassment on those doing the harassing. It shouldn’t be the person who’s being harassed who has to do a lot of work.

    “One way of thinking about it is: I may have a right to say something, but I don’t have a right to stand in your living room and scream it into your ear five times in a row. Right? I think there are things you can do on the platform that are of varying degrees of severity — not just black and white.”

    Previously, Costolo had vowed to “kick off trolls left and right.”

    Making abuse reports a bigger priority and assigning more people to deal with them is definitely helpful, as you’d think it would lessen the turnaround time from moment of reporting to Twitter taking action. But Twitter can suspend all the accounts it wants and make it hard for people to find a way back on Twitter – people will find a way to harass if they really want to.

    Image via Rosaura Ochoa, Flickr Creative Commons

  • Twitter Must Make It Harder to Be an Abuser, Says CEO

    Twitter is aware that it has a problem with trolls and abusive content on the site. Twitter has taken and is currently taken steps to combat the seemingly endless amounts of abuse that some suffer on the network – but it’s clearly not enough.

    CEO Dick Costolo says that he takes full responsibility for this, and that Twitter must shift in order to not “lose core user after core user”.

    But how, exactly, will Twitter do this?

    Speaking to BuzzFeed, Costolo was vague but did offer up some clues about a couple of changes Twitter is working on. Both of them involve a huge shift in how abuse is reported and how visible certain content remains on the site.

    “Importantly, the onus is on you as the abused to report,” Costolo said. “If an account gets suspended they just pop up again somewhere else and then you have to go through that whole process again. It has to be the case that the economics of that whole situation are completely reversed, so that it’s difficult to be an abuser, more expensive to be an abuser. It makes it harder for your speech on the platform to be heard.”

    Although Twitter did make some improvements to the abuse reporting mechanisms back in December, the process still requires the harassed to report the harassers – every single one of them.

    And as Costolo says, blocking trolls is a giant game of whack-a-mole.

    How Twitter plans to make it “more expensive to be an abuser” is anybody’s guess. As long as users are allowed to just create an account with any old email address, it seems damn near impossible to prevent someone from harassing someone via various accounts – even if they’re constantly being reported and banned.

    The other thing Costolo told BuzzFeed is a bit more interesting – mainly because it seems like a more viable solution: reduced visibility.

    “The way I would frame it,” Costolo said, “is people should have a right to speak freely on the platform, but you don’t necessarily have a right to have your mentions of me show up in my mentions timeline with whatever you choose to say, and your response is that I can call you whatever I want to call you. I think that’s one way to think about it. I generally have the right to speak freely on the platform, but I don’t have the right to have whatever nasty thing I want to say about you show up in your mentions.

    Twitter has always tried to walk a fine line between protecting its users and allowing total free expression. Costolo’s comments here reflect a desire to shift towards protection, by limiting what tweets even get through.

    Sure, if you want to call someone an ugly slut on Twitter, that’s your right – but it doesn’t mean Twitter has to display it on the person’s timeline.

    Image via Garrett Heath, Flickr Creative Commons

  • Twitter Talks Google Deal, Says User Growth Trend Already Turned Around This Year

    Twitter Talks Google Deal, Says User Growth Trend Already Turned Around This Year

    Twitter reported its Q4 and fiscal year 2014 financial results on Thursday, with 97% year-over-year revenue growth for the quarter at $479 million. Ad revenue per thousand timeline views reached $2.37 in the quarter, which was up 60% year-over-year. The company managed to impress with its business, but continued to disappoint in the user growth department, which is an area the company has been heavily criticized over since going public.

    Average Monthly Active Users (MAUs) were 288 million for the fourth quarter, which was an increase of 20% year-over-year. The company noted that this reflects a loss of about 4 million net Monthly Active Users in the quarter due to changes in third party integrations (specifically iOS 8). Users grew at a rate of just 1.4 for the quarter compared to 4.8% the prior quarter. Average Mobile MAUs were 80% of total MAUs. Timeline views reached 182 billion for the quarter (up 23% year-over-year). Twitter sees 6,000 tweets per minute every day, according to the company.

    All in all, Twitter added 4 million users during the quarter and 47 million throughout 2014. CEO Dick Costolo said on the earnings call that user numbers the company saw in January of this year indicate its MAU trend has already been turned around. He indicated that new Twitter features like native video, group messaging, and Instant Timeline (which populates the timelines of new users) should contribute to an upward trend. He also mentioned the company’s recent acquisition of ZipDial, which he said it will use to bring more content (like key moments and commentary from the Cricket World Cup) to a much larger audience on Twitter.

    Twitter is also doing a lot to build its developer ecosystem, as Costolo also brought up. This should lead to new apps and services that can contribute to user growth. Last fall, the company unveiled its new Fabric developer kits and Digits sign-in. This year, the company has already embarked on a developer tour called Flock, which will see the company helping developers build apps.

    Costolo said during the Q&A portion of Twitter’s earnings conference call that he could confirm that Twitter has entered into an agreement with Google, but declined to elaborate on any more details about it. In the past, the two companies have worked together to show tweets in real time in Google’s search results. From the sound of it this is what’s going to happen again, though it remains to be seen if it will function the same way. Either way, it’s going to get tweets in front of people more often, and that can’t hurt user growth.

    During the call, Costolo was asked why a Google deal didn’t make sense any longer when the two companies grew apart a few years ago, and why it makes more sense now. His answer (via Seeking Alpha) was as follows:

    We’ve obviously had a relationship with Google over the course of the years with all the bunch of the executives here and a bunch of the executives there obviously know each other quite well.

    I would say that the way we think about the Google deal now without again — without going into any of the details distinct from the kind of relationship we had in the past is that we’ve got the opportunity now to drive a lot of attention to an aggregate eye balls if you will to these logged out experiences, topics and events that we plan on delivering on the front page of Twitter. And that’s one of the reasons this makes a lot more sense for us now.

    He also made clear that we won’t see a launch from the deal for several months.

    As one analyst mentioned, the Google deal should have an impact on Twitter’s revenue in terms of licensing, but the company declined to discuss that for the time being.

    Regarding the iOS 8 changes that impacted Twitter’s user base, CFO Anthony Noto said:

    So we said we lost four million monthly active users due to the iOS8 integration. One million of those monthly active users were Twitter owned and operated monthly active users and three million were on Safari, what we call Auto point MAU’s and we lost those.

    We don’t expect to get the three million Autopoint MAU’s in Safari back and that’s a non-Twitter owned and operated Autopoint MAU. The one million that number was actually higher at a different point in the quarter when we were able to bring it back down to just one.

    Costolo added:

    We obviously have a great relationship with Apple. I’ve talked about that at length over the course of the last two years. On the second part of what Anthony talked about there, there was unforeseen bug in the release of iOS8 as it relates to the specific Twitter integration into iOS that’s why it was particular to us. Once we understood the issue, we move just quickly as we could on multiple fronts to minimize its impact, but it wasn’t — it wasn’t a one size fits off fix, which is why you’ve seen some of the complexity that we talked about here in brining those users back. The problem was a complex and affected different users differently.

    The Wall Street Journal reports that while hitting a record low, Twitter’s user growth fell below Facebook’s for the first time. According to Re/code, Twitter has revoked access to user growth numbers from its employees.

    Image via Twitter

  • Twitter to Kick Trolls Off ‘Right and Left’, Says CEO

    Twitter CEO Dick Costolo has admitted something we’re all well aware of: Twitter is pretty bad at handling instances of abuse on its platform.

    “We suck at dealing with abuse and trolls on the platform and we’ve sucked at it for years. It’s no secret and the rest of the world talks about it every day. We lose core user after core user by not addressing simple trolling issues that they face every day,” said Costolo in an internal memo obtained by The Verge.

    “I’m frankly ashamed of how poorly we’ve dealt with this issue during my tenure as CEO. It’s absurd. There’s no excuse for it. I take full responsibility for not being more aggressive on this front. It’s nobody else’s fault but mine, and it’s embarrassing.”

    The admission came in response to internal discussions about a recent This American Life story, in which writer Lindy West talks about her harassment at the hands of some on Twitter.

    If you’re Twitter, it’s hard to deal with this issue for a multitude of reasons. For one, you don’t want to be a platform that’s seen to be limiting free expression.

    On the other hand, Twitter can’t be a platform for rape threats. What’s the line? Where does Twitter draw it if they find it?

    In August of last year, following a spate of high-profile stories of large-scale Twitter harassment, Twitter promised to work on its anti-abuse policies. By December, Twitter had unveiled new protocols for reporting abuse.

    In the leaked memo, Costolo promises to get rid of “these people” at all costs, saying that everyone in Twitter leadership knows how “vital” it is.

    “We’re going to start kicking these people off right and left and making sure that when they issue their ridiculous attacks, nobody hears them,” says Costolo.

    Image via Wikimedia Commons

  • Jack Dorsey Tweets Praise For Twitter CEO

    On Thursday, Twitter co-founder Jack Dorsey unleashed a series of tweets about Twitter’s place in the world, and showed support for CEO Dick Costolo, who has been under fire from some investors and analysts of late. Some are calling for his ouster, but Dorsey appears to have set out to affirm that he’s still the right man for the job.

    He makes some pretty good points.

    Dorsey, of course, knows the CEO role well having served in the position at Twitter originally, and currently serving as the CEO of Square, which is valued at somewhere around $6 billion.

    The “string of amazing launches” Dorsey refers to would include this week’s announcement of native video on Twitter’s mobile apps and the addition of group messaging.

    Image via Wikimedia Commons

  • Bad News For Those Looking For More Twitter Traffic

    Twitter seems to have a real user growth problem, and it’s scaring away investors. Meanwhile, it’s making changes that a lot of its loyal users don’t really like, and it’s sending less traffic to websites. Simply put, there’s not a lot of great news going on with the Twitterverse at the moment.

    Have you seen a decline in your Twitter referrals? Do you like the changes it’s been making? Can Twitter turn around its growth problem? Discuss in the comments.

    Twitter released is quarterly earnings report this week. It managed to hit Wall Street expectations, but those weren’t all that great to begin with. As the company once again reported lackluster user growth, the stock tanked. It fell at least 32% year-to-date, and CNN Money named it the worst performer in is Tech 30 index.

    CEO Dick Costolo said in the earnings report, “We had another very strong financial quarter. I’m confident in our ability to build the largest daily audience in the world, over time, by strengthening the core, reducing barriers to consumption and building new apps and services.”

    Apparently investors aren’t as confident.

    Twitter reported 284 million average monthly active users, which is up 23% year-over-year, but just 5% from the previous quarter. This number has always seemed unbelievably low considering how much we hear about Twitter in the media, and how big a part it is of many of our lives at this point, but it is the reality.

    It’s not the only reason, but this is one of the reasons Twitter doesn’t come anywhere close to driving the kind of traffic to websites Facebook drives. It’s just not nearly as big.

    Shareaholic released its quarterly report on social media referrals, and Twitter is tanking in that department as well. While it’s still in third place behind Facebook and Pinterest, it’s headed in the opposite direction of both of those.

    According to the report, Facebook is driving four times as much traffic to sites as second place Pinterest, and Pinterest is pretty far ahead of Twitter, as the following graph illustrates.

    See that green line? That’s Twitter. It blends in with all the rest of the remaining social networks, and the line is headed downward. Frankly, considering how much traffic StumbleUpon is capable of driving to sites, it’s kind of surprising to even see Twitter above it. At this rate, that might not even last, especially now that StumbleUpon has made an adjustment that could actually help website traffic.

    Here’s another look at the Shareaholic data from a more numbers-driven perspective:

    twitter referrals decline

    “On a mission to be more like Facebook, Twitter may have lost its way,” writes Shareaholic’s Danny Wong in the report. “Since September 2013, Twitter’s share has steadily declined from 1.17% (its 13-month high) to 0.88% (its 13-month low) last month. This is a loss of 0.29 percentage points (down 24.97%).”

    It’s that “mission to be more like Facebook” that has put off some users. It’s not entirely clear how much it’s really put them off, but there have certainly been plenty of complaints. Earlier this month, Twitter formally announced its new changed that places content in users’ Timelines from people they don’t follow – content Twitter thinks they’ll find relevant. It’s hard to say just how well they’ve been executing this so far.

    Timeline views, by the way, reached 181 billion in the third quarter, which is up 14% year-over-year. That’s less growth than with the monthly active users.

    It’s definitely true that the Twitter experience extends far beyond what would be considered monthly active users. Costolo talked about this with CNBC:

    We have an aspirational goal to build the largest daily audience in the world. And that audience is comprised of what i would call three geometrically eccentric circles. At the core, you have those 284 million monthly active users who create all the content that is used across the rest of the entire system. In the circle beyond that, you have the hundreds of millions of users who come to Twitter but don’t log in. Those logged out users, and we have talked about the size of that audience a little bit…And then thirdly, you have the circle beyond that, which is the syndicated audience. All those users across the web that consume and experience Twitter content in syndication that we have now also added to mobile application syndication with the launch of our mobile app developer kit Fabric.

    Fabric was introduced at Twitter’s Flight developer conference last week. More on that here.

    I would say that we have three priorities with respect to the business in general, and growing that largest daily audience – they’re one, of course. Strengthening the core. Growing that logged in, monthly active user base. That is priority number one. Beyond that, when I talk about reducing the barriers to consumption, and helping those logged out users get an experience right away, we have started to execute on that. For example, in the last quarter, we released our mobile profiles experience. And those new mobile profiles have dramatically increased the number of views, the number of engagements, and the number of specifically on media content views on those profile experiences. So we like a lot of the strategy. We have got to grow that logged out audience. Our first bit of work around the logged out audience that comes to profiles has been tremendously successful, and we’ll continue to execute on that across the rest of the logged out audience.

    What any of this means for website referrals remains to be seen. Furthermore, those monthly active user and timeline view numbers are going to be key sticking points for investors in quarters to come. Hopefully Twitter doesn’t make too many ill-conceived changes to the Timeline experience leading to even slower growth.

    Twitter did make an announcement this week that could prove helpful to enterprise businesses. The company has partnered with IBM to provide data to various enterprise solutions, and to co-develop new solutions that could help things like customer service, marketing, and sales.

    Do you expect Twitter to get things headed in the right direction, or is it on the wrong path? Let us know what you think.

    Images via Twitter, Shareaholic

  • Twitter Earnings Released, Revenue Up 114%

    Twitter just released its earnings report for the third quarter with revenue of $361 million, up 114% year-over-year. The company posted a net loss of $175 million and non-GAAP net income of $7 million, with GAAP EPS of ($0.29) and non-GAAP EPS of $0.01.

    Average monthly active users hit 283 million with 13 million net additions, the company said. Timeline views reached 181 billion, which is up 14% compared to the same period last year. Ad revenue per thousand timeline views reached $1.77, up 83%.

    CEO Dick Costolo said, “We had another very strong financial quarter. I’m confident in our ability to build the largest daily audience in the world, over time, by strengthening the core, reducing barriers to consumption and building new apps and services.”

    This comes just after Shareaholic put out its quarterly report on social media referral traffic, finding that Twitter’s share of that has plummeted 25% over the past year to a 13-month low.

    Twitter’s earnings were in line with analysts’ expectations, but shares were on the decline when the company released its report.

    Here’s the release in its entirety:

    SAN FRANCISCO, Calif. – October 27, 2014 – Twitter, Inc. (NYSE: TWTR) today announced financial results for the quarter ended September 30, 2014.

    • Q3 revenue of $361 million, up 114% year-over-year
    • Q3 net loss of $175 million and non-GAAP net income of $7 million
    • Q3 GAAP EPS of ($0.29) and non-GAAP EPS of $0.01
    • Q3 adjusted EBITDA of $68 million, representing an adjusted EBITDA margin of 19%

    “We had another very strong financial quarter” said Dick Costolo, CEO of Twitter. “I’m confident in our ability to build the largest daily audience in the world, over time, by strengthening the core, reducing barriers to consumption and building new apps and services.”

    Third Quarter 2014 Operational Highlights

    • Average Monthly Active Users (MAUs) were 284 million for the third quarter, an increase of 23% year-over-year.
    • Average Mobile MAUs represented around 80% of total MAUs.
    • Timeline views reached 181 billion for the third quarter of 2014, an increase of 14% year-over-year.
    • Advertising revenue per thousand timeline views reached $1.77 in the third quarter of 2014, an increase of 83% year-over-year.

    Third Quarter 2014 Product Highlights

    • Users: Twitter launched its biggest update to the profile experience on the iPhone with an increased focus on bios, tweets and photos, making it easy for users to get a glimpse into the people they care most about on Twitter, resulting in an 83% increase in profile impressions on iOS. Twitter also launched new consumer experiences around the NFL, making it easy to stay up to date and keep up with the latest action. In the #NFL Timeline, users can see NFL-related Tweets from people in their network, along with relevant Tweets from teams, players, coaches, press, fans and celebrities. Finally, Twitter released a new camera for the Vine app with powerful new ways to edit videos as well as the ability to import existing videos and turn them into Vines.
    • Advertisers: Twitter launched a number of new advertiser tools, including: a Promoted Video beta, which streamlines video playback and brings a one-tap viewing experience to users’ timelines; a test of the “Buy” button, allowing users to complete an entire purchase directly from a tweet; objective-based campaigns, reports and pricing, which make it easier for advertisers to create and optimize successful marketing campaigns and pay only for the actions that are aligned with their marketing objectives; and new tools to make it even easier to create, manage and activate tailored audiences on Twitter. The new tailored audience features include audience list upload capability, better audience management tools, new supported ID types for creating audiences – specifically, mobile advertising IDs and mobile phone numbers – and improved targeting options to help advertisers reach additional users similar to their existing audiences.
    • International Expansion: Twitter continued the international expansion of Twitter Ads to 12 additional markets in Central, Continental and Eastern Europe. In addition, Twitter entered 12 new countries with its self-service ad products for small- and medium-sized businesses (SMBs): Argentina, Chile, Colombia, Ecuador, Guatemala, Mexico and Peru in Latin America, and Belgium, France, Italy, Luxembourg and the Netherlands in Europe. Twitter’s self serve ad products now serve marketers in 20 countries that, in aggregate, account for more than 45% of its global monthly active user base.
    • Developers: Twitter announced its first mobile developer conference, Flight, where it subsequently unveiled Fabric, a modular, integrated SDK that combines the functionality of Crashlytics, the MoPub ad serving platform, and a new Twitter SDK to help developers build and deliver scalable, stable apps with state of the art app monitoring, mobile identity and monetization services.
    • Acquired Companies: Finally, Twitter closed the acquisitions of CardSpring, a payments infrastructure company, TapCommerce, a leader in mobile retargeting and re-engagement advertising, and SnappyTV, a platform for video editing and distribution.

    Third Quarter 2014 Financial Highlights

    Revenue – Revenue for the third quarter of 2014 totaled $361 million, an increase of 114% compared to $169 million in the same period last year.

    • Advertising revenue totaled $320 million, an increase of 109% year-over-year.
    • Mobile advertising revenue was 85% of total advertising revenue.
    • Data licensing and other revenue totaled $41 million, an increase of 171% year-over-year.
    • International revenue totaled $121 million, an increase of 176% year-over-year.
    • International revenue was 34% of total revenue.

    Net loss – GAAP net loss was $175 million for the third quarter of 2014 compared to a GAAP net loss of $65 million in the same period last year. GAAP net loss for the third quarter of 2014 included $170 million of stock-based compensation expense.

    Adjusted EBITDA – Adjusted EBITDA was $68 million for the third quarter of 2014, an increase of 635% compared to $9 million in the same period last year.

    Non-GAAP net income / loss – Non-GAAP net income was $7 million for the third quarter of 2014 compared to a non-GAAP net loss of $17 million in the same period last year. Non-GAAP net income was negatively impacted by $8 million in non-cash foreign exchange adjustments resulting from currency fluctuations, as reported in other expense. In addition, non-GAAP net income was negatively impacted by $0.6 million in higher interest expense due to the completion of the company’s convertible note offering in the third quarter, as reported in interest expense. Without these items, non-GAAP net income would have been $15.4 million.

    EPS – Basic and diluted GAAP EPS was ($0.29) for the third quarter of 2014 compared to ($0.48) in the same period last year.

    Non-GAAP EPS – Non-GAAP EPS was $0.01 for the third quarter of 2014 compared to ($0.13) in the same period last year. Non-GAAP EPS was negatively impacted by $8 million in non-cash foreign exchange adjustments resulting from currency fluctuations, as reported in other expense. In addition, non-GAAP EPS was negatively impacted by $0.6 million in higher interest expense due to the completion of the company’s convertible note offering in the third quarter, as reported in interest expense. Without these items, using non-GAAP diluted shares of 683 million, non-GAAP EPS would have been $0.02.

    Capital expenditures – Purchases of property and equipment for the third quarter of 2014 were $39 million. Additionally, $62 million of equipment was financed through capital leases during the third quarter of 2014.

    Cash, cash equivalents and marketable securities – As of September 30, 2014, cash, cash equivalents and marketable securities were approximately $3.6 billion, compared to $2.1 billion as of June 30, 2014, reflecting the successful completion of the company’s convertible note offering.

    Outlook

    Twitter’s outlook for the fourth quarter of 2014 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 $100 million to $105 million.
    • Capital expenditures are projected to be in the range of $120 million to $150 million.
    • Stock-based compensation expense is projected to be in the range of $175 million to $185 million, excluding the impact of equity awards that may be granted in connection with potential future acquisitions.

    Twitter’s revised outlook for the full year of 2014 is as follows:

    • Revenue is projected to be in the range of $1,365 million to $1,375 million.
    • Adjusted EBITDA is projected to be in the range of $260 million to $265 million.
    • Capital expenditures are projected to be in the range of $360 million to $390 million.
    • Stock-based compensation expense is projected to be in the range of $630 million to $640 million excluding the impact of equity awards that may be granted in connection with potential future acquisitions.

    Webcast and Conference Call Details
    Twitter will host a conference call today, Monday, October 27, 2014, 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 284 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 revenue, adjusted EBITDA, capital expenditures and stock-based compensation expense for the fourth quarter and full year 2014. 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 Annual Report on Form 10-K for the year ended December 31, 2013 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 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 September 30, 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.

    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.

  • Twitter Shows Favorites In Timeline When It Has Nothing Else To Show

    Twitter Shows Favorites In Timeline When It Has Nothing Else To Show

    Last month, news came out that Twitter would start showing favorites and other activity in users’ timelines. The concept didn’t sit too well with some users.

    Twitter updated its help documentation to say:

    Additionally, when we identify a Tweet, an account to follow, or other content that’s popular or relevant, we may add it to your timeline. This means you will sometimes see Tweets from accounts you don’t follow. We select each Tweet using a variety of signals, including how popular it is and how people in your network are interacting with it. Our goal is to make your home timeline even more relevant and interesting.

    Twitter was vague about exactly what people would see and when. Kurt Wagner at Re/code posted an article that seemed to suggest that thing wouldn’t get too invasive. Here’s a snippet:

    Sources familiar with the update say Twitter’s algorithm searches for popular tweets in your “social graph,” marked by actions like favorites and retweets. But it’s not showing you those tweets specifically because of one of your pal’s actions — it’s showing it to you because lots of your pals have shown interest in that tweet.

    This means that every tweet you favorite won’t appear in someone else’s feed — it would require engagement from a number of other people, too.

    The changes will apparently be even more subtle yet. Over the holiday weekend, CEO Dick Costolo tweeted (via The Verge) about the changes, indicating that the type of content in question would only appear after users pulled their timelines down to refresh two times, suggesting they were hungry for more content. This stuff would appear when Twitter doesn’t have anything better to show.

    Costolo’s comments would seem to suggest that users who aren’t following many accounts are most likely to see this other content because if you’re following a lot of accounts, you’re always going to have fresh tweets to consume.

    Image via Twitter

  • Snapchat’s $10 Billion Valuation ‘Not Absurd’ Says Twitter CEO

    Reacting to the news that ephemeral messaging app Snapchat was moving fast toward a $20 million investment from Kleiner Perkins at a $10 billion valuation, Twitter CEO Dick Costolo is defending it – calling it “not absurd.”

    “Crazy growth, clear monetization path, & one of the best social product thinkers out there,” he tweeted.

    The Wall Street Journal quoted sources familiar with the matter who say that not only is this new round of funding upcoming, but “DST Global, the Russian investment firm led by Yuri Milner, also invested in Snapchat earlier this year at a valuation of $7 billion.”

    There’s no denying that Snapchat may be the fastest-growing social app. It’s also inspired a comically pointless ripoff from a huge international company. It’s also so popular among teens that they aren’t sure how to survive without it.

    But $10 billion, some have asked For a company with no real revenue?

    That “clear monetization strategy” that Costolo refers to isn’t really that clear at this point. In-app purchases and traditional advertising both reportedly remain on the table.

    We first heard rumors of a new round of funding for Snapchat back in July, when it was reported that a variety of investors, including Alibaba, were looking to give the company the lofty $10 billion valuation.

    Image via Snapchat, Twitter

  • Twitter Revenue Up 124%, Monthly Active Users Up 24%

    Twitter just released its earnings report for the second quarter. This is the company’s third such report since going public last year.

    The company beat analysts’ estimates, and stock is quickly taking off.

    Revenue was was $312 million, up 124% year-over-year.

    Net loss for the quarter was $145 million, and non-GAAP net income was $15 million. GAAP EPS were ($0.24) and non-GAAP EPS were $0.02.

    Average monthly active users were 271 million as of June 30, up 24% year-over-year. Mobile MAUs were 211 million, up 29%, and representing 78% of all MAUs. Timeline views hit 173 billion, up 15%.

    Ad revenue per thousand timeline views hit $1.60, up 100% year-over-year.

    CEO Dick Costolo said, “Our strong financial and operating results for the second quarter show the continued momentum of our business. We remain focused on driving increased user growth and engagement, and by developing new product experiences, like the one we built around the World Cup, we believe we can extend Twitter’s appeal to an even broader audience.”

    Ad revenue growth has been driven by higher engagement, Costolo said on the conference call.

    Costolo is really proud of how Twitter performed during the World Cup. They had 2 billion tweet impressions off of Twitter during World Cup (in addition to all the on-property tweeting).

    They have a team working on building fast service in developing markets.

    The size of Twitter’s audience is two to three times that of just the monthly active user base, Costolo said. He said they believe that puts them in the top ten of digital audiences in the world. Total audience and reach represent a “significant opportunity” and they’ll continue to invest in maximizing the size of its audience.

    “We will position ourselves to reach the largest audience in the world and every person on the planet,” he said.

    Twitter has a sales presence in over 40 countries.

    The company noted on the call that it has closed the recently announced acquisition of Tap Commerce.

    During the Q&A, Costolo said they’re not monetizing the off-site Twitter audience yet.

    The company says that it helps make other brands better as opposed to “disrupting” them.

    They didn’t benefit from new MAU growth because of the World Cup, apparently. It drove engagement from existing users.

    You’ll continue to see other experiments like the “buy” button.

    Here’s the release in its entirety:

    SAN FRANCISCO, Calif. – July 29, 2014 – Twitter, Inc. (NYSE: TWTR) today announced financial results for the second quarter ended June 30, 2014.

    • Q2 revenue of $312 million, up 124% year-over-year
    • Q2 net loss of $145 million and non-GAAP net income of $15 million
    • Q2 GAAP EPS of ($0.24) and non-GAAP EPS of $0.02
    • Q2 adjusted EBITDA of $54 million, representing an adjusted EBITDA margin of 17%

    “Our strong financial and operating results for the second quarter show the continued momentum of our business,” said Dick Costolo, CEO of Twitter. “We remain focused on driving increased user growth and engagement, and by developing new product experiences, like the one we built around the World Cup, we believe we can extend Twitter’s appeal to an even broader audience.”

    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.

    Second Quarter 2014 Operational Highlights

    • Average Monthly Active Users (MAUs) were 271 million as of June 30, 2014, an increase of 24% year-over-year.
    • Mobile MAUs reached 211 million in the second quarter of 2014, an increase of 29% year-over-year, representing 78% of total MAUs.
    • Timeline views reached 173 billion for the second quarter of 2014, an increase of 15% year-over-year.
    • Advertising revenue per thousand timeline views reached $1.60 in the second quarter of 2014, an increase of 100% year-over-year.

    Second Quarter 2014 Product Highlights

    • Twitter introduced new product experiences that were built around the World Cup, including real-time scoring, push notifications, event and match timelines, and a voting ballot feature. In addition, Twitter launched new web profiles and the ability to send private messages within Vine.
    • Twitter launched a number of new advertiser tools including mobile app promotions, which allow mobile app developers to drive installs and engagements on Twitter, and website cards, which allow advertisers to easily surface website content within a Tweet and drive relevant traffic to any page of their site such as their home page, product page, or an important blog post.
    • Twitter continued the international expansion of its advertising products, expanding state/region geo-targeting to help marketers meet local advertising objectives in additional countries including the UK, France, and Indonesia, among others, and launching its self service ad platform for small and medium sized businesses in Spain, Israel and South Africa.
    • Twitter closed the acquisition of Gnip, a leading provider of social data, and entered into agreements to acquire several other companies including TapCommerce, a leader in mobile retargeting and re-engagement advertising, and SnappyTV, a platform for video editing and distribution.

    Second Quarter 2014 Financial Highlights

    Revenue – Revenue for the second quarter of 2014 totaled $312 million, an increase of 124% compared to $139 million in the same period last year.

    • Advertising revenue totaled $277 million, an increase of 129% year-over-year.
    • Mobile advertising revenue was 81% of total advertising revenue.
    • Data licensing and other revenue totaled $35 million, an increase of 90% year-over-year.
    • International revenue totaled $102 million, an increase of 168% year-over-year.
    • International revenue was 33% of total revenue.

    Net loss – GAAP net loss was $145 million for the second quarter of 2014 compared to a net loss of $42 million in the same period last year. Twitter’s GAAP net loss included $158 million of stock-based compensation expense.

    Adjusted EBITDA – Adjusted EBITDA was $54 million for the second quarter of 2014, an increase of 461% compared to $10 million in the same period last year.

    Non-GAAP net income / loss – Non-GAAP net income was $15 million for the second quarter of 2014 compared to a Non-GAAP net loss of $16 million in the same period last year.

    EPS – Basic and diluted GAAP EPS was ($0.24) for the second quarter of 2014 compared to ($0.32) in the same period last year.

    Non-GAAP EPS – Non-GAAP EPS was $0.02 for the second quarter of 2014 compared to ($0.12) in the year ago period.

    Capital expenditures – Purchases of property and equipment for the second quarter of 2014 were $44 million. Additionally, $31 million of equipment was financed through capital leases during the second quarter of 2014.

    Cash, cash equivalents and marketable securities – As of June 30, 2014, cash, cash equivalents and marketable securities were approximately $2.1 billion, compared to $2.2 billion as of March 31, 2014.

    Outlook

    Twitter’s outlook for the third quarter of 2014 is as follows:

    • Revenue is projected to be in the range of $330 million to $340 million.
    • Adjusted EBITDA is projected to be in the range of $40 million to $45 million.
    • Stock-based compensation expense is projected to be in the range of $180 million to $190 million excluding the impact of equity awards that may be granted in connection with potential future acquisitions.

    Twitter’s revised outlook for the full year of 2014 is as follows:

    • Revenue is projected to be in the range of $1,310 million to $1,330 million.
    • Adjusted EBITDA is projected to be in the range of $210 million to $230 million.
    • Capital expenditures are projected to be in the range of $330 million to $390 million.
    • Stock-based compensation expense is projected to be in the range of $640 million to $690 million excluding the impact of equity awards that may be granted in connection with potential future acquisitions.

    Webcast and Conference Call Details
    Twitter will host a conference call today, Tuesday, July 29, 2014, 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 271 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 our 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 revenue, adjusted EBITDA, capital expenditures and stock-based compensation expense for the third quarter and full year 2014. 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: our 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 Annual Report on Form 10-K for the year ended December 31, 2013 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 filed with the Securities and Exchange Commission. Additional information will also be set forth in our Quarterly Report on Form 10-Q for the quarter ended June 30, 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.

    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 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:
    Nils Erdmann
    ir@twitter.com

    Press:
    Jim Prosser
    jprosser@twitter.com

    Image via Twitter

  • Twitter Revenue Up 119%, Monthly Active Users Up 25%

    Twitter just released its earnings report for the first quarter. This is its second earnings report as a public company.

    Revenue was $250 million, up 119% year-over-year, and up from $243 million the previous quarter.

    Net loss for the quarter was $132 million, and non-GAAP net income was $183 thousand. GAAP EPS was $0.23 with non-GAAP EPS at $0.00. Adjusted EBITDA was $37 million.

    CEO Dick Costolo said, “We had a very strong first quarter. Revenue growth accelerated on a year over year basis fueled by increased engagement and user growth. We also continue to rapidly increase our reach and scale. With the integration of MoPub, we now reach more than 1 billion iOS and Android users each month, making us one of the largest in-app mobile ad exchanges in the world and the only one at scale to offer native in-app advertising.”

    Average monthly active users were 255 million as of the end of March. That’s up 25% year-over-year. They reported 241 by the end of the year, and were criticized for slow growth.

    Mobile monthly active users were 198 million in the first quarter, up 31% year-over-year. That accounts for 78% of total monthly active users. Mobile MAUs were 184 million in Q4.

    Timeline views hit 157 billion for Q1, up 15% year-over-year. Advertising revenue per thousand timeline views reached $1.44 in the quarter, up 96% year-over-year.

    Here’s the release in its entirety:

    SAN FRANCISCO, Calif. – Apr. 29, 2014 – Twitter, Inc. (NYSE: TWTR) today announced financial results for the first quarter ended March 31, 2014.

    • Q1 revenue of $250 million, up 119% year-over-year
    • Q1 net loss of $132 million and non-GAAP net income of $183 thousand
    • Q1 GAAP EPS of ($0.23) and non-GAAP EPS of $0.00
    • Q1 adjusted EBITDA of $37 million, representing an adjusted EBITDA margin of 15%

    “We had a very strong first quarter. Revenue growth accelerated on a year over year basis fueled by increased engagement and user growth,” said Dick Costolo, CEO of Twitter. “We also continue to rapidly increase our reach and scale. With the integration of MoPub, we now reach more than 1 billion iOS and Android users each month, making us one of the largest in-app mobile ad exchanges in the world and the only one at scale to offer native in-app advertising.”

    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 2014 Operational Highlights

    • Average Monthly Active Users (MAUs) were 255 million as of March 31, 2014, an increase of 25% year-over-year.
    • Mobile MAUs reached 198 million in the first quarter of 2014, an increase of 31% year-over-year, representing 78% of total MAUs.
    • Timeline views reached 157 billion for the first quarter of 2014, an increase of 15% year-over-year.
    • Advertising revenue per thousand timeline views reached $1.44 in the first quarter of 2014, an increase of 96% year-over-year.

    First Quarter 2014 Product Highlights

    • Twitter continued to improve its experience for new and existing users by enhancing push notifications, reducing the number of steps in the sign-up process for Android users, and allowing users to link their mobile address book with their Twitter accounts to find people they know on Twitter more quickly.
    • Twitter expanded its global media partnerships with Kantar, GfK and Nielsen to bring Twitter TV measurement to even more regions of the world including Europe, Australia, and parts of Africa and Southeast Asia.
    • Twitter launched improved tools for advertisers, allowing them to create tailored audiences from email lists and CRM databases, target TV conversations for Spanish-language television, and connect with users through Promoted Accounts in search.

    First Quarter 2014 Financial Highlights

    Revenue – Revenue for the first quarter of 2014 totaled $250 million, an increase of 119% compared to $114 million in the same period last year.

    • Advertising revenue totaled $226 million, an increase of 125% year-over-year.
    • Mobile advertising revenue was approximately 80% of total advertising revenue.
    • Data licensing and other revenue totaled $24 million, an increase of 76% year-over-year.
    • International revenue totaled $70 million, an increase of 183% year-over-year. International revenue was 28% of total revenue.

    Net loss – GAAP net loss was $132 million for the first quarter of 2014 compared to a net loss of $27 million in the same period last year. Twitter’s GAAP net loss included $126 million of stock-based compensation expense.

    Adjusted EBITDA – Adjusted EBITDA was $37 million for the first quarter of 2014 compared to $12 million in the same period last year.

    Non-GAAP net income / loss – Non-GAAP net income was $183 thousand for the first quarter of 2014 compared to a Non-GAAP net loss of $11 million in the same period last year.

    EPS – Basic and diluted GAAP EPS was ($0.23) for the first quarter of 2014 compared to ($0.21) in the same period last year.

    Non-GAAP EPS – Non-GAAP EPS was $0.00 for the first quarter of 2014 compared to ($0.08) in the year ago period.

    Capital expenditures – Purchases of property and equipment for the first quarter of 2014 were $50 million. Additionally, $17 million of equipment was financed through capital leases during the first quarter of 2014.

    Cash, cash equivalents and marketable securities – As of March 31, 2014, cash, cash equivalents and marketable securities were approximately $2.2 billion, compared to $2.2 billion as of December 31, 2013.

    Outlook

    Twitter’s outlook for the second quarter of 2014 is as follows:

    • Revenue is projected to be in the range of $270 million to $280 million.
    • Adjusted EBITDA is projected to be in the range of $25 million to $30 million.
    • Stock-based compensation expense is projected to be in the range of $170 million to $180 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 2014 is as follows:

    • Revenue is projected to be in the range of $1,200 million to $1,250 million.
    • Adjusted EBITDA is projected to be in the range of $180 million to $205 million.
    • Capital expenditures are projected to be in the range of $330 million to $390 million.
    • Stock-based compensation expense is projected to be in the range of $640 million to $690 million excluding the impact of equity awards that may be granted in connection with potential future acquisitions.

    Webcast and Conference Call Details
    Twitter will host a conference call today, Tuesday, April 29, 2014, 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 255 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 our expectations, strategy, plans or intentions. Forward-looking statements in this press release include, but are not limited to, Twitter’s expectations regarding its revenue, adjusted EBITDA, capital expenditures and stock-based compensation expense for the second quarter and full year 2014. 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: our 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 Annual Report filed with the Securities and Exchange Commission on March 6, 2014. Additional information will also be set forth in our Quarterly Report on Form 10-Q for the quarter ended March 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.

    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), 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 and the income tax effects related to acquisitions.

    Twitter uses the non-GAAP financial measures of adjusted EBITDA, non-GAAP net income (loss) 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) 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) and non-GAAP EPS. Twitter also believes that adjusted EBITDA, non-GAAP net income (loss) 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:
    Nils Erdmann
    ir@twitter.com

    Press:
    Jim Prosser
    jprosser@twitter.com

    Image via Twitter

  • Twitter Earnings Released, Revenue Up 116%

    Twitter just released its earnings report for Q4 and fiscal year 2013, its first such report as a public company.

    Revenue for the quarter was up 116% year-over-year at $243 million. For the year it was up 110% at $665 milllion.

    CEO Dick Costolo said, “Twitter finished a great year with our strongest financial quarter to date. We are the only platform that is public, real-time, conversational and widely distributed and I’m excited by the number of initiatives we have underway to further build upon the Twitter experience.”

    Average monthly active users were 241 million by the end of the year. This was an increase of 30% year-over-year. Mobile monthly active users were 184 million in Q4, up 37% year-over-year, representing 76% of total MAUs. Timeline views reached 148 billion during the quarter, up 26% year-over-year.

    User growth has apparently not been fast enough for investors, as the stock is plummeting in after hours trading despite revenues beating Wall Street estimates.

    Ad revenue per thousand timeline views reached $1.49. That’s up 76% year-over-year.

    On the earnings call, Costolo talked up Twitter use surrounding the show The Voice. Moments like these and the holiday shopping season (also referenced by CFO Mike Gupta), he said, contributed to a great quarter.

    He did talk about user growth, saying the company is confident in its ability to continue to scale revenue by expanding global reach and ad products. He said they’re doubling down in 2014 to accelerate the growth of the core user base, a path it started down in Q4, he said.

    He said buy bringing content forward, and pushing the “scaffolding of the language of Twitter” to the background, they are increasing quality interactions, and have taken initial steps in the direction with media-forward timelines and inline social interactions. These are working well, he said.

    He noted that favorites/retweets were up more than 35% since launching these features, and search is one of the fastest growing features with a 120 percent increase in total searches year over year.

    It will be a combination of changes, Costolo said, that will start to change the slope of the growth curve.

    Each timeline view is increasing in value, he said, as users are interacting at a much higher rate than ever before.

    He said there is significant room for monetization growth in 2014 with new ad products. He noted that the international expansion of the self serve ads has just begun.

    There will be “many more” launches in 2014.

    Here’s the release in its entirety:

    SAN FRANCISCO, Calif. – Feb. 5, 2014 – Twitter, Inc. (NYSE: TWTR) today announced financial results for the fourth quarter and fiscal year ended December 31, 2013.

    • Q4 revenue of $243 million, up 116% year-over-year
    • Q4 net loss of $511 million and non-GAAP net income of $10 million
    • Q4 GAAP EPS of ($1.41) and non-GAAP EPS of $0.02
    • Q4 adjusted EBITDA of $45 million, representing an adjusted EBITDA margin of 18%
    • Full year revenue of $665 million, up 110% year-over-year
    • Full year net loss of $645 million and non-GAAP net loss of $34 million
    • Full year GAAP EPS of ($3.41) and non-GAAP EPS of ($0.18)
    • Full year adjusted EBITDA of $75 million, representing an adjusted EBITDA margin of 11%

    “Twitter finished a great year with our strongest financial quarter to date,” said Dick Costolo, CEO of Twitter. “We are the only platform that is public, real-time, conversational and widely distributed and I’m excited by the number of initiatives we have underway to further build upon the Twitter experience.”

    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 2013 Operational Highlights

    • Average Monthly Active Users (MAUs) were 241 million as of December, 31, 2013, an increase of 30% year-over-year.
    • Mobile MAUs reached 184 million in the fourth quarter of 2013, an increase of 37% year-over-year, representing 76% of total MAUs.
    • Timeline views reached 148 billion in the fourth quarter of 2013, an increase of 26% year-over-year.
    • Advertising revenue per thousand timeline views reached $1.49 in the fourth quarter of 2013, an increase of 76% year-over-year.

    Fourth Quarter 2013 Product Highlights

    • Twitter continued to improve return on investment for its advertisers by launching a number of new advertising products including TV Conversation Targeting, Tailored Audiences, Conversion Tracking and Promoted Accounts in Timeline.
    • Twitter made its platform more accessible to a broader range of advertisers by launching its self-serve advertising platform to small and medium-sized businesses in the UK, Ireland and Canada.
    • Twitter continued to improve its overall user experience by launching a number of new product enhancements including media forward, in-line social actions, Twitter Alerts, custom timelines, and the ability to send and receive photos via direct message and swipe between timelines. Vine is also available in 19 new languages on both iOS and Android as of December 31, 2013.
    • Twitter closed the acquisition of MoPub, Inc. a mobile-focused advertising exchange, making it easier for its advertisers to automate and scale their advertising buys.

    Fourth Quarter 2013 Financial Highlights

    Revenue – Revenue for the fourth quarter of 2013 totaled $243 million, an increase of 116% compared to $112 million in the same period last year.

    • Advertising revenue totaled $220 million, an increase of 121% year-over-year.
    • Mobile advertising revenue was more than 75% of total advertising revenue.
    • Data licensing and other revenue totaled $23 million, an increase of 80% year-over-year.
    • International revenue totaled $66 million, an increase of 200% year-over-year. International revenue was 27% of total revenue.

    Net loss – GAAP net loss was $511 million for the fourth quarter of 2013 compared to a net loss of $9 million in the same period last year. The company’s Q4 GAAP net loss included $521 million of stock-based compensation expense, of which $406 million was for restricted stock units previously granted to employees, for which no expense had been recognized, until the effective date of our initial public offering in accordance with GAAP.

    Adjusted EBITDA – Adjusted EBITDA was $45 million for the fourth quarter of 2013 compared to $18 million in the same period last year.

    Non-GAAP net income / loss – Non-GAAP net income was $10 million for the fourth quarter of 2013 compared to a Non-GAAP net loss of $0.3 million in the same period last year.

    EPS – Basic and diluted GAAP EPS was ($1.41) for the fourth quarter of 2013 compared to ($0.07) in the same period last year.

    Non-GAAP EPS – Non-GAAP EPS was $0.02 for the fourth quarter of 2013 compared to ($0.00) in the year ago period.

    Capital expenditures – Purchases of property and equipment for the fourth quarter of 2013 were $29 million. Additionally, $60 million of equipment was procured or financed through capital leases during the fourth quarter of 2013.

    Cash, cash equivalents and marketable securities – As of December 31, 2013, cash, cash equivalents and marketable securities were approximately $2.2 billion, compared to $321 million as of September 30, 2013.

    Outlook

    Twitter’s outlook for the first quarter of 2014 is as follows:

    • Revenue is projected to be in the range of $230 million to $240 million.
    • Adjusted EBITDA is projected to be in the range of $10 million to $16 million.
    • Stock-based compensation expense is projected to be in the range of $145 million to $155 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 2014 is as follows:

    • Revenue is projected to be in the range of $1,150 million to $1,200 million.
    • Adjusted EBITDA is projected to be in the range of $150 million to $180 million.
    • Capital expenditures are projected to be in the range of $330 million to $390 million.
    • Stock-based compensation expense is projected to be in the range of $600 million to $650 million excluding the impact of equity awards that may be granted in connection with potential future acquisitions.

    Webcast and Conference Call Details
    Twitter will host a conference call today, February 5, 2014, 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, the company’s financial results and supplemental slides will be accessible from the Investor Relations page of the company’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 more than 240 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 our expectations, strategy, plans or intentions. Forward-looking statements in this press release include, but are not limited to, Twitter’s expectations regarding its revenue, adjusted EBITDA, capital expenditures and stock-based compensation expense for the first quarter and full year 2014. The Company’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: our 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 the Company’s filings with the Securities and Exchange Commission, including the Prospectus related to Twitter’s initial public offering of common stock filed pursuant to Rule 424(b) under the Securities Act of 1933 (Registration No. 333-191552), filed with the Securities and Exchange Commission on November 7, 2013. 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, the Company considers certain financial measures that are not prepared in accordance with GAAP, including adjusted EBITDA, non-GAAP net income (loss), 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 and the income tax effects related to acquisitions.

    The Company uses the non-GAAP financial measures of adjusted EBITDA, non-GAAP net income (loss) 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) 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) and non-GAAP EPS. Twitter also believes that adjusted EBITDA, non-GAAP net income (loss) and non-GAAP EPS provide useful information about its operating results, enhance the overall understanding of the Company’s past performance and future prospects and allow for greater transparency with respect to key metrics used by the Company’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. The Company is presenting these non-GAAP financial measures to assist investors in seeing the Company’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:
    Nils Erdmann
    ir@twitter.com

    Press:
    Jim Prosser
    jprosser@twitter.com



     

    Image via Twitter

  • Biz Stone Looks To Lead Jelly As A Cross Between Evan Williams, Jack Dorsey and Dick Costolo

    Twitter co-founder Biz Stone appeared on Bloomberg Television today to talk about his new app Jelly, but ended up talking a bit about Twitter as well.

    His time at Twitter and the people he worked with there are apparently having a major affect on Stone’s first go at the CEO role.

    “It sounds kinda cheesy to say this, but I look up to Evan and Jack and Dick,” he said in the interview. “I like to kind of steal their best traits and fold them in to my own leadership skills. But my main thing as a leader is to be as communicative as possible. I think that’s like 50% or 75% of the job as a CEO — to make sure everybody knows everything they need to know.”

    “It is great,” he said. “I love it. The fact that I have Kevin Thau at my back, that really made all the difference. We were talking before about how we didn’t really intend to make this a company. In fact, I was telling Kevin Thau, one of my friends and trusted advisors, about the idea. And he just said, ‘I’m in.’ And I thought he meant he likes the idea. And then I went to dinner at his house and he said ‘hey, Biz – Jelly, I’m in.’ I said, what does that mean? Is that something the kids are saying? He said, no, I want to do this. So once he decided to come on board, that’s when really I said, well with your help, I think I can make a good CEO.”

    Stone’s new app accumulated Twice as many new accounts in three days as Twitter did in an entire year. I’d say that’s a good start.

    Stone, by the way, thinks the story in the “Hatching Twitter” book is a fair representation of the founding of Twitter.

    Image via Twitter

  • You May Soon Be Able To Buy And Sell Products Directly On Twitter

    You May Soon Be Able To Buy And Sell Products Directly On Twitter

    Soon, businesses may be able to sell products directly on Twitter as the company is reportedly in the final stages of making a deal with payments startup Stripe.

    This according to Re/Code, citing people familiar with the deal, which is not yet complete.

    Neither company is commenting, but this would be a move that we’ve seen coming from Twitter for months, if not years.

    All the way back in 2011, CEO Dick Costolo spoke about commerce opportunities for Twitter. He talked about how the San Diego Chargers had used Twitter to quickly sell 1,000 tickets to a game that would have otherwise been blacked out.

    “There’s a commerce opportunity there for us to take advantage of if we want,” Costolo said. “How can we remove friction from the process?”

    That was over two years before Twitter went public. Now, it needs revenue streams more than ever, and it looks like they’re ready to make a move in that direction.

    More recently, this past August, Twitter announced that it had hired former Ticketmaster boss Nathan Hubbard as its new Head of Commerce (Twitter really has a thing for tickets apparently). Bloomberg quoted him as saying:

    “We’re going to go to people who have stuff to sell and help them use Twitter to sell it more effectively.”

    “One of the hallmarks of Twitter’s entire approach has been partnering. We’re going to take the same approach with owners of physical and digital goods.”

    Earlier in the year, Twitter partnered with AmEx to let cardholders use Twitter to buy things using hashtags.

    Image via Stripe

  • Buxom Beer Wench Graces Ladies’ Room at Twitter HQ

    When your company is under fire for its lack of women in leadership roles, and your CEO makes a pretty ill-advised response to said criticism, the last thing you want to be doing is promoting anything – anything that could be perceived as even borderline sexist, misogynistic, or any other type of -ist, -ism, or -istic.

    Twitter engineering manager Jill Wetzler tweeted this photo of a sign she found in the women’s restroom at Twitter HQ. Hashtag facepalm indeed.

    I mean, it’s probably just advertising some social gathering for engineers. Hey, it is Oktoberfest at Twitter HQ…

    And it’s just a dumb sign. But given that Twitter’s IPO filing shone a light on the fact that Twitter’s board, investors, and most of the officers are all men? Well, let’s just say it’s pretty poor timing.

    Image via Jill Wetzler, Twitter

  • With Twitter IPO Pending, User Growth Comes Into Question

    Now that Twitter has announced its filing for a planned IPO, we can all expect the scrutiny knob to be cranked up to the max. This is no doubt why Twitter has gone the confidential route, but that doesn’t mean analysts and the blogosphere at large won’t pick apart every aspect of the company possible from the inside out.

    A day after the announcement, the company’s growth rate has already come into question.

    Twitter announced that it hit 200 million monthly active users in December.

    A far cry from Facebook’s over a billion, but nothing to shake a stick at. However, there might be some unrealistic expectations for the company’s immediate future from within the company. All Things D is reports:

    A few months later, CEO Dick Costolo told employees he expected to get to 400 million users by the end of 2013, according to people familiar with the company. Sources say that Twitter now has around 240 million users, which means it has been adding fewer than 4.5 million users a month in 2013. If it continued to grow at that rate, it would end this year around the 260 million mark — meaning that its user base would have grown by about 30 percent, instead of Costolo’s 100 percent goal.

    Frankly, it’s hard to see how Twitter would double its users that quickly when it took so long to get to the 200 million mark in the first place. It certainly doesn’t seem to be losing any popularity, but that’s a pretty big goal to live up to.

    Image: Dick Costolo (Twitter)

  • Twitter CEO Commits Minor NCAA Recruiting Violation on His Own Service

    When the top wide receiver prospect in the country decided to commit to the University of Michigan on Saturday, Twitter CEO Dick Costolo was excited. He was excited because he’s a University of Michigan man through and through. Not only did he graduate with his BS from the school, but he gave this year’s Spring commencement address to the graduating class.

    He’s also a booster. That means that the congratulatory tweet that he sent 5-star prospect George Campbell is technically a recruiting violation.

    Campbell responded:

    The NCAA’s rules on boosters prevent them from contacting prospects:

    Only institutional staff members are permitted to recruit prospective student-athletes. Generally, NCAA rules prohibit anyone else from contacting (calling, writing or in-person contact) prospects or the prospect’s relatives or guardian for recruiting purposes.

    Students are still considered prospects even if they have signed a National Letter of Intent or any other financial aid agreement with a university.

    “We are aware of a potential minor violation involving social media,” said Michigan spokesman Dave Ablauf in a statement. “We will handle it as appropriate.”

    It’s a minor violation and shouldn’t result in any sort of repercussions. But it is funny.

  • Twitter CEO Previews Likely Coming Video Sharing Feature

    Last fall, Twitter acquired video creation and sharing company Vine for an undisclosed amount. Now, a day after Twitter announced the launch of enhanced Tweet embeds, which support videos, Twitter CEO has tweeted out a video using Vine (via TechCrunch). It looks something like this:

    Common thinking around the Blogosphere is that this translates to Twitter getting ready to launch its own video offering based on Vine, which would be pretty big for Twitter users, no longer having to rely on third-party services.

    And with the new, neat embeds, we can probably expect to start seeing interesting (and not so interesting) videos from celebrities and other users all over the web.