Twitter Q3 Tops Forecasts
October 25, 2018
Twitter reported financial results
for its third quarter 2018. The social media firm reported earnings per
share of 21 cents (adjusted) against 14 cents that was expected. On the
revenue side, Twitter delivered $758 million verses the $702.6
million which investors sought. The company noted monthly active users (MAUs)
of 326 million with only 330.1 million being expected.
"We're achieving meaningful progress in our efforts to make Twitter a
healthier and valuable everyday service," said Jack Dorsey, Twitter's
CEO. "We're doing a better job detecting and removing spammy and
suspicious accounts at sign-up. We're also continuing to introduce
improvements that make it easier for people to follow events, topics and
interests on Twitter, like adding support for U.S. TV shows in our new
event infrastructure. This quarter's strong results prove we can
prioritize the long-term health of Twitter while growing the number of
people who participate in public conversation."
"Our third quarter results reflect our success with advertisers,
delivering revenue growth of 29 percent and better than expected growth
across most products and geographies," said Ned Segal, Twitter's CFO.
"We are demonstrating Twitter's unique value proposition for advertisers
through innovative ad formats, better relevance and continued
improvement in ROI. Advertisers are choosing Twitter to reach the most
valuable audience when they are most receptive."
Quarter 2018 Operational and Financial Highlights
revenue totaled $758 million,
an increase of 29% year-over-year, or an increase of
30% year-over-year when excluding the approximately
$7 million of revenue
in Q3'17 (its final quarter with reported revenue)
from our fully-deprecated TellApart product.
Advertising revenue totaled
$650 million, an
increase of 29% year-over-year.
Total ad engagements increased 50%
Cost per engagement (CPE) decreased 14%
Data licensing and other revenue totaled
$108 million, an
increase of 25% year-over-year.
US revenue totaled $423
million, an increase of 28%
International revenue totaled
$335 million, an
increase of 30% year-over-year.
GAAP costs and expenses totaled
$666 million, an
increase of 14% year-over-year.
Q3 non-GAAP costs and expenses totaled
$570 million, an
increase of 22% year-over-year.
GAAP net income was $789
million, compared to a net loss of
$21 million in the
previous year, representing a GAAP net margin of
104% and GAAP diluted EPS of
$1.02. Excluding the release of deferred tax
asset valuation allowances of
$683 million, we generated Q3 net income of
$106 million, net
margin of 14%, and diluted EPS of
Q3 non-GAAP net income was
compared to $78 million
in the same period of the previous year,
representing a non-GAAP net margin of 21% and
non-GAAP diluted EPS of
adjusted EBITDA was $295
million compared to
$207 million in the same period of the
previous year, representing an adjusted EBITDA
margin of 39%.
Average daily active users (DAU) increased 9%
year-over-year, compared to 14% in the same period
of the previous year and compared to 11% in the
Average monthly active users (MAU) were 326 million
for Q3, compared to 330 million in the same period
of the previous year and compared to 335 million in
the previous quarter, impacted by a number of
factors including: GDPR, decisions we have made to
prioritize the health of the platform and not move
to paid SMS carrier relationships in certain
markets, as well as a product change that reduced
automated usage and a technical issue that
temporarily reduced the number of notifications
Average US MAUs were 67 million for Q3, compared
to 69 million in the same period of the previous
year and compared to 68 million in the previous
Average international MAUs were 259 million for
Q3, compared to 260 million in the same period
of the previous year and compared to 267 million
in the previous quarter.
Adjusted EBITDA to be between
$320 million and $340
Adjusted EBITDA margin to be between 39% and 40%
Capital expenditures to be between
$60 million and
Stock-based compensation expense to be in the range
of $85 million to