Form 8-K TWITTER, INC. For: Feb 05

Delaware

�

001-36164

�

20-8913779

(State or other jurisdiction of
incorporation)

�

(Commission File Number)

�

(IRS Employer
Identification No.)

�

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

�

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

�

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

�

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

(d)

Exhibits.

Exhibit�Number

��

Description

�

�

99.1

��

�

Press release issued by Twitter, Inc. dated February 5, 2015.

TWITTER, INC.

�

By:

�

�

/s/ Vijaya Gadde

�

�

Vijaya Gadde

�

�

General Counsel & Secretary

Exhibit�Number

��

Description

�

�

99.1

��

�

Press release issued by Twitter, Inc. dated February 5, 2015.

�

Q4 revenue of $479 million, up 97% year-over-year

�

Q4 net loss of $125 million and non-GAAP net income of $79 million

�

Q4 GAAP EPS of ($0.20) and non-GAAP EPS of $0.12

�

Q4 adjusted EBITDA of $141 million, representing an adjusted EBITDA margin of 30%

�

2014 revenue of $1,403 million, up 111% year-over-year

�

2014 net loss of $578 million and non-GAAP net income of $101 million

�

2014 GAAP EPS of ($0.96) and non-GAAP EPS of $0.14

�

2014 adjusted EBITDA of $301 million, representing an adjusted EBITDA margin of 21%

�

Three Months Ended

�

�

Year Ended

�

�

December 31,

�

�

December 31,

�

�

2014

�

�

2013

�

�

2014

�

�

2013

�

GAAP Results

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Revenue

$

479,078

�

�

$

242,675

�

�

$

1,403,002

�

�

$

664,890

�

Net loss

$

(125,352

)

�

$

(511,471

)

�

$

(577,820

)

�

$

(645,323

)

Diluted net loss per share

$

(0.20

)

�

$

(1.41

)

�

$

(0.96

)

�

$

(3.41

)

Non-GAAP Results

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Adjusted EBITDA

$

141,490

�

�

$

44,745

�

�

$

300,896

�

�

$

75,430

�

Non-GAAP net income (loss)

$

79,320

�

�

$

9,774

�

�

$

101,071

�

�

$

(34,330

)

Non-GAAP diluted net income (loss) per share

$

0.12

�

�

$

0.02

�

�

$

0.14

�

�

$

(0.18

)

�

Average Monthly Active Users (MAUs) were 288 million for the fourth quarter, an increase of 20% year-over-year, which reflects a loss of approximately 4 million net Monthly Active Users in the fourth quarter due to changes in third party integrations.

�

Average Mobile MAUs represented approximately 80% of total MAUs.

�

Timeline views reached 182 billion for the fourth quarter of 2014, an increase of 23% year-over-year.

�

Advertising revenue per thousand timeline views reached $2.37 in the fourth quarter of 2014, an increase of 60% year-over-year.

�

Users: Twitter launched the ability for people to share a Tweet privately through a Direct Message, making it easier for people to have private discussions around public content. Twitter also launched the Audio Card, which lets people discover and listen to audio directly in their timeline on Android and iOS devices.

�

Advertisers: Twitter began testing Twitter Offers in the United States, enabling advertisers to create credit card-linked promotions and share them directly with people on Twitter. Twitter also launched tailored audiences for mobile apps, a new way for advertisers to create targetable audience segments based on mobile app actions such as installs, purchases, or sign-ups. Finally, Twitter launched two new mobile targeting options including the ability to target by mobile carrier and the ability to target users with new mobile devices.

�

International Expansion: Twitter continued the international expansion of advertising offerings to 13 additional markets worldwide. Twitters self serve ad products expanded to 8 new markets in Q4 and now serve marketers in 28 countries.��

�

Developers: Twitter held its first mobile developer conference, Flight, where it unveiled Fabric, a�single modular Software Developer Kit consisting of app stability and analytics tools through Crashlytics, monetization offerings through MoPub, identity and sign-in services through Twitter and a first-of-its-kind offering called Digits, and content distribution and syndication through an improved Twitter SDK.

�

January Launches: In January, Twitter launched�a�recap�feature, marked with a While you were away heading,�that�surfaces at the top of the Timeline�some of the�best�Tweets�people�may have missed�from accounts people follow;�group Direct Messaging,�which lets people expand private conversations from one other participant to as many as 20, and�new video functionality that allows people�to capture, edit and share videos right from�within�the Twitter app.

�

Advertising revenue totaled $432 million, an increase of 97% year-over-year.

�

Mobile advertising revenue was 88% of total advertising revenue.

�

Data licensing and other revenue totaled $47 million, an increase of 105% year-over-year.

�

International revenue totaled $164 million, an increase of 149% year-over-year.��

�

International revenue was 34% of total revenue.

�

Revenue is projected to be in the range of $440 million to $450 million.

�

Adjusted EBITDA is projected to be in the range of $89 million to $94 million.

�

Stock-based compensation expense is projected to be in the range of $160 million to $170 million, excluding the impact of equity awards that may be granted in connection with potential future acquisitions.

�

Revenue is projected to be in the range of $2.3 billion to $2.35 billion.

�

Adjusted EBITDA is projected to be in the range of $550 million to $575 million.

�

Capital expenditures are projected to be in the range of $500 million to $650 million.

�

Stock-based compensation expense is projected to be in the range of $700 million to $750 million, excluding the impact of equity awards that may be granted in connection with potential future acquisitions.

�

�

December 31,

�

�

December�31,

�

�

2014

�

�

2013

�

Assets

�

�

�

�

�

�

�

Current assets:

�

�

�

�

�

�

�

Cash and cash equivalents

$

1,510,724

�

�

$

841,010

�

Short-term investments

�

2,111,154

�

�

�

1,393,044

�

Accounts receivable, net

�

418,454

�

�

�

247,328

�

Prepaid expenses and other current assets

�

215,521

�

�

�

93,297

�

Total current assets

�

4,255,853

�

�

�

2,574,679

�

Property and equipment, net

�

557,019

�

�

�

332,662

�

Intangible assets

�

105,011

�

�

�

77,627

�

Goodwill

�

622,570

�

�

�

363,477

�

Other assets

�

42,629

�

�

�

17,795

�

Total assets

$

5,583,082

�

�

$

3,366,240

�

Liabilities and stockholders equity

�

�

�

�

�

�

�

Current liabilities:

�

�

�

�

�

�

�

Accounts payable

$

53,241

�

�

$

27,994

�

Accrued and other current liabilities

�

228,233

�

�

�

110,310

�

Capital leases, short-term

�

112,320

�

�

�

87,126

�

Total current liabilities

�

393,794

�

�

�

225,430

�

Convertible notes

�

1,376,020

�

�

�



�

Capital leases, long-term

�

118,950

�

�

�

110,520

�

Deferred and other long-term tax liabilities, net

�

24,706

�

�

�

59,500

�

Other long-term liabilities

�

43,209

�

�

�

20,784

�

Total liabilities

�

1,956,679

�

�

�

416,234

�

Stockholders equity:

�

�

�

�

�

�

�

Common stock

�

3

�

�

�

3

�

Additional paid-in capital

�

5,208,870

�

�

�

3,944,952

�

Accumulated other comprehensive loss

�

(10,024

)

�

�

(323

)

Accumulated deficit

�

(1,572,446

)

�

�

(994,626

)

Total stockholders equity

�

3,626,403

�

�

�

2,950,006

�

Total liabilities and stockholders equity

$

5,583,082

�

�

$

3,366,240

�

�

Three Months Ended

�

�

Year�Ended

�

�

December 31,

�

�

December 31,

�

�

2014

�

�

2013

�

�

2014

�

�

2013

�

Revenue

$

479,078

�

�

$

242,675

�

�

$

1,403,002

�

�

$

664,890

�

Costs and expenses

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Cost of revenue

�

136,613

�

�

�

112,651

�

�

�

446,309

�

�

�

266,718

�

Research and development

�

181,715

�

�

�

394,848

�

�

�

691,543

�

�

�

593,992

�

Sales and marketing

�

203,599

�

�

�

177,305

�

�

�

614,110

�

�

�

316,216

�

General and administrative

�

55,304

�

�

�

67,547

�

�

�

189,906

�

�

�

123,795

�

Total costs and expenses

�

577,231

�

�

�

752,351

�

�

�

1,941,868

�

�

�

1,300,721

�

Loss from operations

�

(98,153

)

�

�

(509,676

)

�

�

(538,866

)

�

�

(635,831

)

Interest income (expense), net

�

(23,513

)

�

�

(2,387

)

�

�

(33,985

)

�

�

(6,860

)

Other income (expense), net

�

1

�

�

�

(2,725

)

�

�

(5,500

)

�

�

(4,455

)

Loss before income taxes

�

(121,665

)

�

�

(514,788

)

�

�

(578,351

)

�

�

(647,146

)

Provision (benefit) for income taxes

�

3,687

�

�

�

(3,317

)

�

�

(531

)

�

�

(1,823

)

Net loss

$

(125,352

)

�

$

(511,471

)

�

$

(577,820

)

�

$

(645,323

)

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Net loss per share:

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Basic and diluted

$

(0.20

)

�

$

(1.41

)

�

$

(0.96

)

�

$

(3.41

)

Weighted-average shares used to

�� compute net loss per share:

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Basic and diluted

�

629,310

�

�

�

362,624

�

�

�

604,990

�

�

�

189,510

�

TWITTER, INC.

�

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

�

(In thousands)

�

(Unaudited)

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Three Months Ended

December 31,

�

�

Year Ended

December 31,

�

�

2014

�

�

2013

�

�

2014

�

�

2013

�

Cash flows from operating activities

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Net loss

$

(125,352

)

�

$

(511,471

)

�

$

(577,820

)

�

$

(645,323

)

Adjustments to reconcile net loss to net cash provided by

�� (used in) operating activities:

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Depreciation and amortization

�

62,428

�

�

�

33,224

�

�

�

208,165

�

�

�

110,894

�

Stock-based compensation expense

�

177,215

�

�

�

521,197

�

�

�

631,597

�

�

�

600,367

�

Amortization of discount on convertible notes

�

16,412

�

�

�



�

�

�

18,823

�

�

�



�

Provision for bad debt

�

1,688

�

�

�

799

�

�

�

4,632

�

�

�

1,557

�

Deferred income tax benefit

�

128

�

�

�

(8,410

)

�

�

(9,609

)

�

�

(8,902

)

Non-cash acquisition-related costs

�



�

�

�

138

�

�

�

320

�

�

�

704

�

Amortization of investment premium and other

�

(1,757

)

�

�

1,333

�

�

�

7,663

�

�

�

3,457

�

Changes in assets and liabilities, net of assets acquired

�� and liabilities assumed from acquisitions:

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Accounts receivable

�

(99,750

)

�

�

(77,798

)

�

�

(177,583

)

�

�

(112,060

)

Prepaid expenses and other assets

�

(24,685

)

�

�

(9,635

)

�

�

(165,395

)

�

�

(12,045

)

Accounts payable

�

12,761

�

�

�

16,249

�

�

�

18,059

�

�

�

7,957

�

Accrued and other liabilities

�

24,230

�

�

�

31,506

�

�

�

122,944

�

�

�

54,792

�

Net cash provided by (used in) operating activities

�

43,318

�

�

�

(2,868

)

�

�

81,796

�

�

�

1,398

�

Cash flows from investing activities

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Purchases of property and equipment

�

(68,791

)

�

�

(29,116

)

�

�

(201,630

)

�

�

(75,744

)

Purchases of marketable securities

�

(1,319,618

)

�

�

(1,291,915

)

�

�

(2,937,033

)

�

�

(1,573,489

)

Proceeds from maturities of marketable securities

�

506,936

�

�

�

55,103

�

�

�

2,029,518

�

�

�

355,270

�

Proceeds from sales of marketable securities

�

19,924

�

�

�

8,051

�

�

�

188,092

�

�

�

42,816

�

Restricted cash

�

(13

)

�

�

(3,306

)

�

�

(11,042

)

�

�

(10,847

)

Business combinations, net of cash acquired and

�� purchases of intangible assets

�



�

�

�

(36,000

)

�

�

(165,177

)

�

�

(44,072

)

Net cash used in investing activities

�

(861,562

)

�

�

(1,297,183

)

�

�

(1,097,272

)

�

�

(1,306,066

)

Cash flows from financing activities

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Net proceeds from issuance of common stock

�



�

�

�

2,019,704

�

�

�



�

�

�

2,018,579

�

Proceeds from issuance of convertible notes

�

89,000

�

�

�



�

�

�

1,889,000

�

�

�



�

Convertible notes initial issuance discount

�

(1,335

)

�

�



�

�

�

(28,810

)

�

�



�

Purchases of convertible note hedges

�

(19,719

)

�

�



�

�

�

(407,169

)

�

�



�

Proceeds from issuance of warrants

�

14,142

�

�

�



�

�

�

289,272

�

�

�



�

Taxes paid related to net share settlement of equity awards

�

(885

)

�

�

(14,637

)

�

�

(17,053

)

�

�

(14,637

)

Repayments of capital lease obligations

�

(28,059

)

�

�

(21,203

)

�

�

(103,135

)

�

�

(70,445

)

Proceeds from exercise of stock options, net of repurchase

�

3,631

�

�

�

1,742

�

�

�

28,658

�

�

�

8,679

�

Proceeds from issuances of common stock under

�� employee stock purchase plan

�

21,178

�

�

�



�

�

�

42,402

�

�

�



�

Other financing activities

�

1,219

�

�

�



�

�

�

(1,443

)

�

�



�

Net cash provided by financing activities

�

79,172

�

�

�

1,985,606

�

�

�

1,691,722

�

�

�

1,942,176

�

Net increase (decrease) in cash and cash equivalents

�

(739,072

)

�

�

685,555

�

�

�

676,246

�

�

�

637,508

�

Foreign exchange effect on cash and cash equivalents

�

(2,999

)

�

�

(249

)

�

�

(6,532

)

�

�

174

�

Cash and cash equivalents at beginning of period

�

2,252,795

�

�

�

155,704

�

�

�

841,010

�

�

�

203,328

�

Cash and cash equivalents at end of period

$

1,510,724

�

�

$

841,010

�

�

$

1,510,724

�

�

$

841,010

�

Supplemental disclosures of non-cash investing and financing activities

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Conversion of preferred stock to common stock

$



�

�

$

872,536

�

�

$



�

�

$

872,536

�

Common and convertible preferred stock issued in connection

�� with acquisitions

$



�

�

$

218,821

�

�

$

147,958

�

�

$

331,766

�

Equipment purchases under capital leases

$

30,276

�

�

$

60,222

�

�

$

140,685

�

�

$

155,722

�

Changes in accrued equipment purchases

$

(7,783

)

�

$

(18,124

)

�

$

6,562

�

�

$

(1,602

)

Unpaid deferred offering costs

$



�

�

$

1,162

�

�

$



�

�

$

1,162

�

�

Three Months Ended

�

�

Year�Ended

�

�

December 31,

�

�

December 31,

�

�

2014

�

�

2013

�

�

2014

�

�

2013

�

Non-GAAP net income (loss) and net income (loss) per share:

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Net loss

$

(125,352

)

�

$

(511,471

)

�

$

(577,820

)

�

$

(645,323

)

Stock-based compensation expense

�

177,215

�

�

�

521,197

�

�

�

631,597

�

�

�

600,367

�

Amortization of acquired intangible assets

�

10,419

�

�

�

5,569

�

�

�

36,563

�

�

�

16,530

�

Non-cash interest expense related to convertible notes

�

16,412

�

�

�



�

�

�

18,823

�

�

�



�

Income tax effects related to acquisitions

�

626

�

�

�

(5,521

)

�

�

(8,092

)

�

�

(5,904

)

Non-GAAP net income (loss)

$

79,320

�

�

$

9,774

�

�

$

101,071

�

�

$

(34,330

)

GAAP diluted shares

�

629,310

�

�

�

362,624

�

�

�

604,990

�

�

�

189,510

�

Diluted effect of preferred stock conversion ⁽¹⁾

�



�

�

�

155,687

�

�

�



�

�

�



�

Other dilutive equity awards ⁽²⁾

�

54,096

�

�

�

93,900

�

�

�

104,497

�

�

�



�

Non-GAAP diluted shares

�

683,406

�

�

�

612,211

�

�

�

709,487

�

�

�

189,510

�

Non-GAAP diluted net income (loss) per share

$

0.12

�

�

$

0.02

�

�

$

0.14

�

�

$

(0.18

)

Adjusted EBITDA:

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Net loss

$

(125,352

)

�

$

(511,471

)

�

$

(577,820

)

�

$

(645,323

)

Stock-based compensation expense

�

177,215

�

�

�

521,197

�

�

�

631,597

�

�

�

600,367

�

Depreciation and amortization expense

�

62,428

�

�

�

33,224

�

�

�

208,165

�

�

�

110,894

�

Interest and other expense, net

�

23,512

�

�

�

5,112

�

�

�

39,485

�

�

�

11,315

�

Provision (benefit) for income taxes

�

3,687

�

�

�

(3,317

)

�

�

(531

)

�

�

(1,823

)

Adjusted EBITDA

$

141,490

�

�

$

44,745

�

�

$

300,896

�

�

$

75,430

�

Stock-based compensation expense by function:

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Cost of revenue

$

13,240

�

�

$

45,927

�

�

$

50,536

�

�

$

50,942

�

Research and development

�

95,942

�

�

�

326,536

�

�

�

360,726

�

�

�

379,913

�

Sales and marketing

�

49,031

�

�

�

104,084

�

�

�

157,263

�

�

�

114,440

�

General and administrative

�

19,002

�

�

�

44,650

�

�

�

63,072

�

�

�

55,072

�

Total stock-based compensation expense

$

177,215

�

�

$

521,197

�

�

$

631,597

�

�

$

600,367

�

Amortization of acquired intangible assets by function:

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Cost of revenue

$

7,524

�

�

$

3,923

�

�

$

26,273

�

�

$

14,884

�

Research and development

�

365

�

�

�

300

�

�

�

1,157

�

�

�

300

�

Sales and marketing

�

2,530

�

�

�

1,346

�

�

�

9,133

�

�

�

1,346

�

General and administrative

�



�

�

�



�

�

�



�

�

�



�

Total amortization of acquired intangible assets

$

10,419

�

�

$

5,569

�

�

$

36,563

�

�

$

16,530

�

⁽¹⁾

Gives effect to the conversion of convertible preferred stock into common stock as though the conversion had occurred at the beginning of the period under the if-converted method.

⁽²⁾

Gives effect to potential common stock instruments such as stock options, RSUs, unvested restricted stock and warrant. There is no dilutive effect of the notes nor of the related hedge and warrant transactions.