Twitter Q4 2015 Earnings Deck

Jan Dawson Chief Analyst (408) 744-6244 [email protected] @jandawson

TWITTER Q4 2015 EARNINGS SLIDES

mailto:[email protected]

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• This deck is part of the Jackdaw Research Quarterly Company Decks subscription service, and is one of about a dozen similar decks produced each quarter on major consumer tech companies

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INTRODUCTIONJACKDAW RESEARCH QUARTERLY DECKS SERVICE

http://www.beyonddevic.es

https://jackdawresearch.com/quarterly-company-decks/

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The charts in this deck are based on the company’s reported financial and operating metrics, together with other metrics derived from them by Jackdaw Research. While every effort has been made to ensure the accuracy of the data presented, and the absence of errors, we make no guarantee of accuracy and accept no liability for decisions made based on the information contained in this document. Readers should always consult the source documents if making financial or other decisions regarding the company concerned.

DISCLAIMER

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• In Q1 2015, Twitter discontinued two metrics it had previously reported: Timeline views per monthly active user, and ad revenue per timeline view.

• It also introduced three new metrics:

• SMS Fast Followers: another flavor of monthly active users – those who used SMS to sign up and still only over use SMS to use Twitter. This is mostly an emerging market phenomenon, but will be captured in MAU going forward

• Cost per engagement growth – similar to Google or Yahoo’s cost-per-click metrics, not an actual number, but a year on year and quarter on quarter growth number, intended to measure monetization

• Ad engagements growth – again, similar to number of ads metrics reported by Google and Yahoo, and again only growth, not actuals, intended to measure engagement with ads over time, rather than user engagement with content

NOTESTWITTER REPORTING CHANGES

5 Source: Twitter reporting, Jackdaw Research analysis

REVENUES$ THOUSANDS

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

Q1 2011 Q3 2011 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015


REVENUES BY SOURCE$ THOUSANDS

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

Q1 2011 Q3 2011 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015

Advertising revenue Data licensing & Other


AD REVENUE$ THOUSANDS

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

Q1 2011 Q3 2011 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015


REVENUES BY SOURCE% OF TOTAL REVENUES

0%

25%

50%

75%

100%

Q1 2011 Q3 2011 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015

Advertising as % of revenue Data licensing as % of revenue


DATA LICENSING AND OTHERAS A % OF REVENUE

0%

10%

20%

30%

40%

Q1 2011 Q3 2011 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015


GEOGRAPHIC SPLITSINTERNATIONAL SHARE OF MAUS AND OF REVENUES

0%

20%

40%

60%

80%

Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015

75% 75% 76% 76% 76% 78% 77% 78% 78% 78% 78% 78% 78% 79% 79% 79%

22%27% 26% 27% 28%

33% 34% 34% 34%36% 35% 35%

International as % of revenues International as % of MAUs


MOBILE AD REVENUE% OF TOTAL AD REVENUE FROM MOBILE DEVICES

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015


AD REVENUE BY DEVICEESTIMATED MOBILE VS. NON-MOBILE AD REVENUE, $ THOUSANDS

0

100,000

200,000

300,000

400,000

500,000

600,000

Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015

Implied mobile ad revenue Implied non-mobile ad revenue


MARGINS

-300%

-225%

-150%

-75%

0%

75%

Q1 2011 Q3 2011 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015

Operating margin Net margin


COST COMPONENTSEXCLUDING STOCK-BASED COMPENSATION, AS A % OF REVENUE

0%

10%

20%

30%

40%

50%

60%

Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015

Cost of revenue R&D S&M G&A


OPERATING INCOME & MARGINADJUSTED FOR STOCK-BASED COMPENSATION

-60%

-40%

-20%

0%

20%

40%

60%

80%

-75,000

-50,000

-25,000

0

25,000

50,000

75,000

100,000

Q1 2011 Q3 2011 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015

Operating income adj for SBC Operating margin adj for SBC


MONTHLY ACTIVE USERSINCLUDING “SMS FAST FOLLOWERS”, MILLIONS

0

50

100

150

200

250

300

350

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015


MONTHLY ACTIVE USERSMONETIZABLE MAUS, EXCLUDING “SMS FAST FOLLOWERS”, MILLIONS

0

50

100

150

200

250

300

Q1 2010Q3 2010Q1 2011Q3 2011Q1 2012Q3 2012Q1 2013Q3 2013Q1 2014Q3 2014Q1 2015Q3 2015


MONTHLY ACTIVE USERSSPLIT BY TRADITIONAL MAUS AND SMS FAST FOLLOWERS

0

50

100

150

200

250

300

350

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015

MAUs in millions SMS Fast Followers: Worldwide


MONTHLY ACTIVE USERSBY GEOGRAPHY

0

50,000

100,000

150,000

200,000

250,000

Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015

USInternational

-5,000

0

5,000

10,000

15,000

20,000

25,000

Q2 2010 Q4 2010 Q2 2011 Q4 2011 Q2 2012 Q4 2012 Q2 2013 Q4 2013 Q2 2014 Q4 2014 Q2 2015 Q4 2015


MONTHLY ACTIVE USERSSEQUENTIAL GROWTH (EXCLUDING SMS FAST FOLLOWERS), THOUSANDS

Adjustment for one-time loss due to change in third party integrations (iOS 8 impact)


MONTHLY ACTIVE USERSYEAR ON YEAR GROWTH

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Q2 2011 Q4 2011 Q2 2012 Q4 2012 Q2 2013 Q4 2013 Q2 2014 Q4 2014 Q2 2015 Q4 2015

-80%

-60%

-40%

-20%

0%

20%

40%

Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014Q4 2014Q1 2015Q2 2015Q3 2015Q4 2015


COST PER (AD) ENGAGEMENTYEAR ON YEAR GROWTH

“Average cost-per-engagement (CPE) fell 41% year over year, due primarily to the shift to auto-play video, which delivers more engagement at a much lower average CPE than click-to-play video ads. ” – Twitter earnings call, Q3 2015

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014Q4 2014Q1 2015Q2 2015Q3 2015Q4 2015


COST PER (AD) ENGAGEMENTQUARTER ON QUARTER GROWTH

“Average cost-per-engagement (CPE) fell 41% year over year, due primarily to the shift to auto-play video, which delivers more engagement at a much lower average CPE than click-to-play video ads. ” – Twitter earnings call, Q3 2015


AD ENGAGEMENTYEAR ON YEAR GROWTH

0%

100%

200%

300%

400%

500%

600%

700%

800%

Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014Q4 2014Q1 2015Q2 2015Q3 2015Q4 2015


AD ENGAGEMENTQUARTER ON QUARTER GROWTH

-50%

-25%

0%

25%

50%

75%

100%

125%

150%

Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014Q4 2014Q1 2015Q2 2015Q3 2015Q4 2015


AD REVENUE PER MAU, $TWITTER VS. FACEBOOK

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

Q1 2011 Q3 2011 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015

Twitter ad revenue per MAU Facebook ad ARPU


REVENUE PER MAU, $BY GEOGRAPHY

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015

Revenue per MAU: US Revenue per MAU: Intl


REVENUE PER MAU, US, $TWITTER VS. FACEBOOK

0

5

10

15

Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015

Twitter revenue per MAU: US Facebook ARPU: US & Canada


CAPITAL SPENDING$ THOUSANDS (LEFT AXIS), AND CAPITAL INTENSITY (CAPEX/REVENUES)

0%

5%

10%

15%

20%

25%

30%

0

20,000

40,000

60,000

80,000

100,000

120,000

Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015

Capex Capital intensity

Jan Dawson Chief Analyst (408) 744-6244 [email protected] @jandawson

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Twitter Q4 2015 Earnings Deck

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Transcript of Twitter Q4 2015 Earnings Deck