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Twitter Announces First Quarter 2021 Results

Reports 20% Year-over-Year Growth in Monetizable Daily Active Usage (mDAU) and Total Revenue of $1.04 Billion

Image by Photo Mix from Pixabay

Twitter, Inc. today announced financial results for its first quarter  2021. “People turn to Twitter to see and talk about what’s happening, and we are helping them find their interests more  quickly while making it easier to follow and participate in conversations,” said Jack Dorsey, Twitter’s CEO.  “Average monetizable DAU (mDAU) reached 199 million, up 20% year over year and up 7 million sequentially,  driven by ongoing product improvements and global conversation around current events.” 

“Q1 was a solid start to 2021, with total revenue of $1.04 billion up 28% year-over-year, reflecting accelerating  year-over-year growth in MAP revenue and brand advertising that improved throughout the quarter,” said Ned  Segal, Twitter’s CFO. “Advertisers continue to benefit from updated ad formats, improved measurement, and new  brand safety controls, contributing to 32% year-over-year growth in ad revenue in Q1.” 

First Quarter 2021 Operational and Financial Highlights  

Except as otherwise stated, all financial results discussed below are presented in accordance with generally  accepted accounting principles in the United States of America, or GAAP. As supplemental information, we have  provided certain non-GAAP financial measures in this press release’s supplemental tables, and such supplemental  tables include a reconciliation of these non-GAAP measures to our GAAP results. The sum of individual metrics  may not always equal total amounts indicated due to rounding. 

  • Q1 revenue totaled $1.04 billion, an increase of 28% year-over-year. Advertising revenue totaled $899 million, an increase of 32%, or 30% on a constant currency  basis. Total ad engagements increased 11% year-over-year. Cost per engagement (CPE) increased 19% year-over-year. Data licensing and other revenue totaled $137 million, an increase of 9% year-over-year. US revenue totaled $556 million, an increase of 19% year-over-year. International revenue totaled $480 million, an increase of 41%, or 38% on a constant currency  basis. 
  • Q1 costs and expenses totaled $984 million, an increase of 21% year-over-year. This resulted in operating  income of $52 million and 5% operating margin, compared to an operating loss of $7 million or -1% in the  same period of the previous year. 
  • Stock-based compensation (SBC) expenses grew 13% year over year to $111 million and was  approximately 11% of total revenue. 
  • Q1 net income was $68 million, representing a net margin of 7% and diluted EPS of $0.08. This compares to  a net loss of $8 million, a net margin of -1% and diluted EPS of -$0.01 in the same period of the previous  year. 
  • Net cash provided by operating activities in the quarter was $390 million, compared to $247 million in the  same period last year. Capital expenditures totaled $179 million, compared to $121 million in the same period  last year, driven by infrastructure investments in data center build-outs to support audience growth and  product innovation. 
  • Average monetizable daily active users (mDAU) were 199 million for Q1, compared to 166 million in the  same period of the previous year and compared to 192 million in the previous quarter. Average US mDAU were 38 million for Q1, compared to 33 million in the same period of the  previous year and compared to 37 million in the previous quarter. Average international mDAU were 162 million for Q1, compared to 133 million in the same period  of the previous year and compared to 155 million in the previous quarter. 

Outlook  

We are attracting more great people to Twitter than ever before and investing in our highest priorities to deliver on  our long-term goals across consumer product, revenue product, and platform. As a result, we now expect  headcount growth to more closely mirror expense growth in 2021, with headcount — and total costs and expenses  — growing 25% or more on a year-over-year basis in 2021, ramping in absolute dollars over the course of the year. 

As a reminder, SBC expenses are closely tied to headcount, the timing of grants, and vesting, and we typically see a  significant sequential increase in Q2 driven by the timing of refresh grants in the early part of the year. As such, we  expect to report a sequential increase in SBC expense of $60 million or more in Q2. Expected full-year SBC  expenses has also increased to approximately $600 million, from our previous range of $525 million to $575 million,  reflecting increased hiring and retention grants.  

We continue to expect total revenue to grow faster than expenses in 2021, assuming the global pandemic  continues to improve and that we see modest impact from the rollout of changes associated with iOS 14.5. How  much faster will depend on various factors, including our execution on our direct response roadmap and  macroeconomic factors.  

For Q2’21: 

  • Total revenue is expected to be between $980 million and $1.08 billion.
  • GAAP operating loss is expected to be between $170 million and $120 million. 

For FY21: 

  • Stock-based compensation expense is expected to be approximately $600 million. 
  • Capital expenditures are expected to be between $900 million and $950 million.  

Note that our outlook for Q2 and the full year 2021 reflects foreign exchange rates as of April 2021. For more information regarding the non-GAAP financial measures discussed in this press release, please see  “Non-GAAP Financial Measures” and the reconciliations of these non-GAAP financial measures to the most  directly comparable financial measures calculated in accordance with GAAP below. 

Appendix 

First Quarter 2021 Webcast and Conference Call Details 

Twitter will host a conference call today, Thursday, April 29, 2021, at 3pm Pacific Time (6pm Eastern Time) to  discuss financial results for the first quarter of 2021. The company will be following the conversation about the  earnings announcement on Twitter. To have your questions considered during the Q&A, Tweet your question to  @TwitterIR using $TWTR. To listen to a live audio webcast, please visit the company’s Investor Relations page at  investor.twitterinc.com. Twitter has used, and intends to continue to use, its Investor Relations website and the  Twitter accounts of @jack, @nedsegal, @Twitter, and @TwitterIR as means of disclosing material nonpublic  information and for complying with its disclosure obligations under Regulation FD. 

Second Quarter Earnings Release Details 

Twitter expects to release financial results for the second quarter of 2021 on July 22, 2021, after market close.  Twitter will host a conference call on the same day to discuss these financial results at 3pm Pacific Time (6pm  Eastern Time).

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