Twitter (TWTR) reported earnings on Fri 27 July 2018 (b/o)

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Twitter beats by $0.01, beats on revs; guides Q3 Adj-EBITDA below estimates, cautions on MAUs 

• Reports Q2 (Jun) earnings of $0.17 per share, excluding non-recurring items, $0.01 better thanthe Capital IQ Consensus of $0.16; revenues rose 23.8% year/year to $710.54 mln vs the $697.35 mln Capital IQ Consensus.
• Adjusted EBITDA for Q2 was $265 million, or 37% of total revenue, vs. estimates for $261 mln. The co continues to expect full year adjusted EBITDA margin expansion in 2018 due to the significant margin expansion they delivered in the first half of the year. As the co continues to grow its headcount toward the year-end target of 10-15%, the co expects operating expense base to continue to grow in Q3 and again in Q4.
• Overall growth in engagement was driven by a combination of organic growth, marketing, and product improvements. DAU grew 11% year-over-year in Q2, with double-digit growth in five out of the co's top 10 global markets, demonstrating another quarter of broad-based growth. Average MAUs were 335 million for Q2, an increase of 9 million year-over-year and a decrease of 1 million quarter-over-quarter, reflecting impact from decisions the co has made to prioritize the health of the platform, to not move to paid SMS carrier relationships in certain markets and, to a lesser extent, GDPR. In aggregate, these factors reduced MAU by more than 3 million in Q2. Average US MAUs were 68 million for Q2, compared to 68 million in the same period of the previous year and compared to 69 million in the previous quarter. Average international MAUs were 267 million for Q2, compared to 258 million in the same period of the previous year and compared to 267 million in the previous quarter. The co's DAU/MAU ratio remains well below 50%.
• Additional Commentary:
  • As we began 2018, we made deliberate decisions to allocate product and engineering resources that had previously been focused on product improvements designed to deliver growth in audience and engagement to projects related to preparing for GDPR and broader platform health. This prioritization impacts growth in the near term, but we are confident that this is in the best long-term interest of the platform and will enable long-term growth as we improve the health of the public conversation on Twitter and over time reallocate teams from GDPR to other priorities and hire additional product and engineering resources.
  • We may also choose to not move to paid SMS carrier relationships in certain markets where we believe we can deliver a better Twitter experience with Twitter or Twitter Lite. While the magnitude of any potential future impact is difficult to predict, DAU will not be affected because DAU only includes accounts on our owned and operated services such as the Twitter app and twitter.com.
  • As a result of our health work, decisions not to renew or move to paid SMS carrier relationships in certain markets, and our decision to allocate resources towards GDPR and health, MAU could decline on a sequential basis in Q3. Based on our current level of visibility, we expect the decline to be mid-single-digit millions of MAU. As a reminder, DAU growth continues to be the best measure of our success in driving the use of Twitter as a daily utility.
• Sees Q3 Adj-EBITDA of $215-235 mln vs. estimates for ~$268 mln; Adjusted EBITDA margin to be between 33% and 34%

Twitter (TWTR) reoprts earnings Thur 5 Feb 2015 a/h

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Twitter (TWTR) : 1-year performance

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3 weeks later, daily chart:

*****

Twitter's first year performance (Nov 2013 - Nov 2014):

Nov. 19, 2014 -- Twitter Inc. needs a much bigger increase in revenue than the microblogging service expects to justify its share price, according to Aswath Damodaran, a finance professor at New York University.

The above compares Twitter’s stock price since going public in November 2013 with his estimate of the company’s value, $20.81 a share. Damodaran, the author of four books on business valuation, cited the figure in a posting on his blog.

Shares of Twitter have never traded for less than their initial price of $26 apiece. 

“Twitter has its work cut out for it,” Damodaran wrote in the posting. “It has to either find ways to grow much faster than it is projecting or it has to work at bringing investor expectations down.”

The estimate was based on a projected $14 billion in revenue and a 25 percent operating margin, or earnings after production costs as a percentage of sales, in 10 years. Chief Financial Officer Anthony Noto gave the revenue forecast in an investor presentation. The company had $1.17 billion

of sales for the 12 months ended in September 2014.

For Twitter’s valuation to exceed $40, revenue would have to be almost twice Noto’s projection, based on an analysis of data from the posting. A lower operating margin would require even more sales growth, and vice versa.

Twitter shares hit new lows as stock lock-up expires

• Shares of Twitter Inc sank 18 percent to a new low in frenzied trading on Tuesday, wiping out more than $4 billion of its market value, as early investors sold stock in the messaging service for the first time after a six-month "lock-up" expired.
• The lock-up agreement that expired this week applied to about 470 million shares, or 82 percent of Twitter's equity, held by insiders, venture capitalists and other investors. Twitter allowed one batch of shares to be sold in February, but that lockup governed only about 10 million shares, most of which were held by non-executive employees.
• Tuesday's reaction to Twitter's lock-up expiry was in sharp contrast to that of Facebook Inc in late 2012. Facebook shares jumped 13 percent on November 14 that year, when its lock-up expiry of roughly 800 million shares did not trigger an immediate wave of insider selling.
• Twitter's shares have been trading at all-time lows since April 29, when the company disclosed sagging usage metrics.  Indeed, concerns about user growth and engagement levels have wiped out about half of Twitter's market value, more than $18 billion, since late December, even as it has hit revenue targets in the two quarters since it went public at $26 a share.

Until Tuesday, only about 80 million Twitter shares, a fraction of outstanding shares, were publicly traded. About 500 million closely held shares were unlocked for possible trades late Monday. They hit the market at Tuesday's opening bell.

This week's lock-up is the second and by far the largest lock-up period for Twitter, which also freed about 9.9 million shares held by non-executive employees on Feb. 15. The company sold about 70 million shares in its November 2013 initial public offering.

Vijaya Gadde, Twitter's general counsel, sold 3,914 shares on Tuesday at $39.09 apiece, according to a regulatory filing. Vice President of Engineering Christopher Fry sold 19,568 shares at the same price, according to another regulatory filing. Both still hold many shares, with Gadde's holdings totaling 861,642 shares and Fry's at 949,181 following their sales.

Several executives, including CEO Richard Costolo, said in an April 14 regulatory filing that they don't have "current plans" to sell shares.

"This should, arguably, help alleviate some of the potential pressure on the stock in the coming weeks," wrote Sterne Agee analyst Arvind Bhatia in a research note before the lock-up ended.

But Twitter stock nonetheless fell more than 16% to about 32.35 by late afternoon on the stock market today. The stock's trading about 57% off its all-time high of 74.73 on Dec. 26.

Tuesday's trading volume flew north of 100 million shares in late-afternoon trading, about 8x the company's daily average of 13.2 million shares.

Twitter (TWTR) : 5-month performance

Twitter paid $36 million for 900 IBM patents

Twitter Inc., the microblogging service that held an initial public offering last year, paid $36 million to acquire 900 patents from International Business Machines Corp., according to a filing.


The agreement, which was was signed in December and announced in January without financial details, resolved a dispute that prompted IBM to write to Twitter about possible infringement of at least three patents.

Twitter now has 956 patents and about 100 filed patent applications in the U.S., it said in the filing yesterday with the U.S. Securities and Exchange Commission. Before its November IPO, Twitter held only nine patents, making it a target for intellectual-property disputes. The deal with IBM was Twitter's first for patent technology, not counting intellectual property gained by buying other companies. IBM has been granted the most U.S. patents of any company for 21 straight years.

“We presently are involved in a number of intellectual property lawsuits, and as we face increasing competition and gain an increasingly high profile, we expect the number of patent and other intellectual property claims against us to grow,” Twitter said in the filing.

Twitter (TWTR) plunges 24% after its first earnings report on Wed February 5, 2014

Twitter plunged 24% Thursday after the social media specialist released better-than-expected quarterly results, but worried investors with decelerating monthly active user growth.

The company was valued at $35-$40 billion before the earnings release but lost nearly $10 billion of the company’s market value as investors sold on concerns about the slow user growth reflected in Twitter’s report.

Twitter (TWTR) - 1-month performance

Twitter (TWTR) began trading on the NYSE on 7 November 2013

The newly-minted public shares of Twitter have come to market, opening at $45.10 per share — well ahead of conservative predictions.

• Largest IPO since Facebook

Twitter sold 70 million shares in its initial public offering, raising $1.8 billion. The opening price was 73% above the public offering price of $26. At a price at or above the opening, the profitless social media darling has a rather astounding market value of somewhere above $31 billion.

Twitter (TWTR) stock didn’t start trading with the rest of the New York Stock Exchange listings at 9:30 a.m. Market makers are busy matching buyers and sellers. Bloomberg intially reported the Twitter bid was $40 and ask, $44.  At around 10:30 a.m.,  NYSE officials said the stock could open “between $45 and $47,” according to the Wall Street Journal.

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MAJOR TWITTER SHAREHOLDERS

SHARE VALUE

Evan Williams

Co-founder

$2.4 billion

Dick Costolo

Chief executive

$320 million

Jack Dorsey

Chairman & co-founder

$977 million

Suhail Rizvi and Rizvi Traverse

First invested in 2010

$3.5 billion

Peter Fenton and Benchmark Capital, First invested in 2009

$1.3 billion

Share value is based on S.E.C. filings and includes restricted stock.

Boston police spokeswoman Cheryl Fiandaca helped to ring the opening bell of the New York Stock Exchange this morning, invited by Twitter, which was launching its much-anticipated IPO, because of her department’s use of Twitter during the Boston Marathon bombings.

Twitter said Fiandaca, actor Patrick Stewart and nine-year-old activist Vivienne Harr, were “very different people,” but had one thing in common: “they use Twitter in amazing ways.”

Twitter said the department’s tweets served as “a lifeline of communication for the entire city, and served as a defense against miscommunication” during the uncertain days after the April 15 bombings, which killed three people and wounded more than 260 others. 

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Nov. 8 (Bloomberg) -- Twitter Inc.’s revenue will have to surge about 50-fold during the next decade to justify the stock’s price after one day of trading, according to Aswath Damodaran, a finance professor at New York University who specializes in valuation.

     The microblogging service has to generate sales of about $32 billion in 2023 to be worth $45 a share, Damodaran wrote in a posting yesterday on AOL Inc.’s TechCrunch website. Analysts are looking for revenue of $640.2 million this year, based on the average estimate in a Bloomberg survey.

     The chart above illustrates how much Twitter, whose shares closed yesterday at $44.90, would have to grow to reach his revenue estimate. The annual figures are based on the San Francisco-based company’s prospectus for its initial public offering, the Bloomberg survey of estimates for 2013 and 2014, and projected gains of about 45 percent a year from 2015-2023 that would be needed to achieve the $32 billion target.

     “Twitter is a good company, with the potential to be a great one,” Damodaran, the author of four books on valuation, wrote in the posting. “Based on my views of the company, it is not a good investment.”

 Based on his calculations, Twitter is worth $18 a share. That’s 31 percent less than the company’s IPO price of $26 and 60 percent less than yesterday’s close.

     

The estimate assumes Twitter will have about $11.5 billion of revenue in 2023 and account for no more than 5.5 percent of the online advertising market, the posting said. For sales to reach $32 billion, the company would need about a 15 percent market share.

Twitter sets IPO stock price between $17 and $20

Twitter said in a regulatory filing that it will raise as much as $1.6 billion by selling between 70 and 80.5 million shares priced between $17 and $20 each.

• Twitter will be the biggest technology IPO since Facebook went public in May 2012. 
• It will list on the NYSE.
•  It plans to sell 70 million shares between $17 and $20 each for a possible take of $1.6 billion. 
• Shares will trade under the ticker "TWTR."
• 11/4/13 update: Twitter boosts IPO price; sees shares priced $23-$25

Twitter disclosed on Thursday that it planned to price its eagerly awaited initial public offering at $17 a share to $20 a share, as it readies a road show for investors.

The company plans to sell 70 million shares. At the midpoint of the price range, the social network would raise nearly $1.3 billion. And the offering would value Twitter on a fully diluted basis at more than $12 billion.

That would make Twitter four times as big as AOL, but only a fraction of Facebook, which has a market value of more than $127 billion.

Company executives and their advisers will crisscross the country, presenting their case in a series of meetings starting on Monday in Washington and Baltimore.

Twitter has also moved up the pricing of its offering by more than a week, to Nov. 6. That means that the social network would then begin trading on the New York Stock Exchange, under the ticker symbol “TWTR,” the next day.

The IPO is expected to raise $1 billion to $1.5 billion. It will not be the biggest in terms of size — Plains GP Holdings, an energy company, raised $2.8 billion last week — but the Twitter deal is one of the most hotly anticipated offerings since Facebook‘s market debut last year.

Twitter says it filed confidential IPO registration with U.S. Securities and Exchange Commission

• Twitter to list on the NYSE on November 15, 2013

(Reuters) - Twitter Inc has filed for an initial public offering with U.S. regulators, the company said on Thursday, taking the first step toward what would be Silicon Valley's most anticipated debut since Facebook Inc's last year.

The impending IPO of the microblogging phenomenon ignited a competition among Wall Street's biggest names for the prestige of managing its coming-out party. Goldman Sachs is lead underwriter, a source familiar with the matter said on Thursday, which is a major coup for the Wall Street bank.

Twitter filed for an IPO confidentially under a 2012 law intended to help emerging corporations with less than $1 billion in revenue go public.

Its debut, though much smaller than Facebook's, could generate tens of millions of dollars in fees from the underwriting mandate itself. Assuming it sells around 10 percent of its shares, or $1 billion, underwriters could stand to divide a fee pool of $40 million to $50 million, assuming an overall fee cut of 4 percent to 5 percent, according to Freeman & Co.

But the benefits for banks that underwrite the deal would likely be far-reaching.

"Some companies will say, ‘We liked the way you handled Twitter, and we want to come to you first when we do our IPO,'" said David Menlow, president of IPOFinancial.com.

"It's not only bragging rights," Menlow said. "It's getting through the front door, which will line up banks for other transactions done after that, like debt financings and M&A."

Technology bankers at major banks from JPMorgan and Credit Suisse Group AG to Morgan Stanley had vied for coveted lead underwriting roles in the IPO. Several have had informal conversations with the micro-blogging network's management, sources familiar with the matter said.

A similar race is on around China's Alibaba, which is expected to raise more than $15 billion this year. Bank chief executives such as JPMorgan's Jamie Dimon and Citigroup Inc's Michael Corbat have made it a point to meet Alibaba founder Jack Ma.

PHENOM

Seven-year old Twitter, which allows users to send out streams of 140-character messages, has become an indispensable tool to governments, corporations and celebrities seeking to communicate with their audience, and for individuals seeking both news and entertainment.

Twitter, which has been valued by private investors at more than $10 billion, is on track to post $583 million in revenue in 2013, according to advertising consultancy eMarketer.

Max Wolff of Greencrest Capital estimated that Twitter would reach break-even this year, and that it is on track for 40 percent annual growth at a $1 billion annual revenue run rate.

"It's completely conquered mobile. It has an enormous social network. It's becoming a key utility as a second screen to TV and it's literally the first draft of history," Wolff said. "Normally a company like Twitter would have been public for some time."

Twitter is allowed to file its registration statement confidentially due to the Jumpstart Our Business Startups (JOBS) Act, a 2012 law that loosened some of the regulations surrounding the IPO process and other forms of capital raising.

Companies that file under that law do not have to reveal certain details until 21 days before embarking on an investor roadshow.

It could allow Twitter to avoid some of the harsh public scrutiny that other tech companies such as Groupon Inc faced. Groupon in 2011 was plagued by questions about its reliance on what some considered to be unusual accounting practices.

Twitter - profile

In December, Twitter reportedly raised $200 million, valuing the company at $3.7 billion. Investors included the marquee Silicon Valley venture capital firm Kleiner Perkins.

The valuation is more than triple the amount that investors paid in a funding round just a year earlier. Recent discussions have pegged the company's worth at up to $8 billion, making the stakes of Twitter co-founders Biz Stone, Jack Dorsey and Evan Williams likely worth several hundred million dollars apiece.

That's not bad considering that Stone, in an onstage interview at a Federated Media conference in February, said of Twitter: "we're just in the early phases of being a real business."

The San Francisco-based company is not profitable and had 2010 revenue of $45 million, The Wall Street Journal reported.

Among other Twitter shareholders are several prominent tech investors including Ron Conway and Marc Andreesen and venture capital firms Union Square Ventures and Charles River Ventures.