Twitter Confirms Machine Learning has Helped to Identify and Remove Abusive Tweets Significantly

Reports 18% Year-over-Year Total Revenue Growth and 11% Year-over-Year Growth in Monetizable Daily Active Usage

Twitter, Inc. announced financial results for its first quarter 2019.

“We are taking a more proactive approach to reducing abuse and its effects on Twitter,” said Jack Dorsey, Twitter’s CEO. “We are reducing the burden on victims and, where possible, taking action before abuse is reported. For example, we are now removing 2.5x more Tweets that share personal information and ~38% of abusive Tweets that are taken down every week are being proactively detected by machine learning models. We’re also continuing our work to make Twitter more conversational via the launch of our public prototype app (twttr), with the end goal of making conversation on Twitter feel faster, more fluid, and more fun.”

“We’re delivering strong results with ad revenue up 18% year-over-year, demonstrating Twitter’s unique value proposition for advertisers as the best place to launch something new or connect with what’s happening,” said Ned Segal, Twitter’s CFO. “We’ve never been more confident in our strategy and execution and see a great opportunity to grow our audience and deliver even more value for advertisers.”

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First Quarter 2019 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.

• Q1 revenue totaled $787(1) million, an increase of 18% year-over-year or 20% on a constant currency basis
  • Advertising revenue totaled $679 million, an increase of 18% year-over-year or 20% on a constant currency basis.
    • Total ad engagements increased 23% year-over-year.
    • Cost per engagement (CPE) decreased 4% year-over-year
  • Data licensing and other revenue totaled $107 million, an increase of 20% year-over-year.
  • US revenue totaled $432 million, an increase of 25% year-over-year.
  • International revenue totaled $355 million, an increase of 11% year-over-year or 15% on a constant currency basis.
• Q1 costs and expenses totaled $693 million, an increase of 18% year-over-year. This resulted in operating income of $94 million and 12% operating margin.
• Q1 net income was $191 million, representing a net margin of 24% and diluted EPS of $0.25. Excluding the impact of a tax benefit of $124 million related to the establishment of a deferred tax asset for corporate structuring for certain geographies, adjusted net income was $66(2) million, with adjusted net margin of 8% and adjusted diluted EPS of $0.09. In the same period last year, we reported net income of $61 million, net margin of 9%, and diluted EPS of $0.08.
• Average monetizable daily active users (mDAU) were 134(3) million for Q1, compared to 120 million in the same period of the previous year and compared to 126 million in the previous quarter.
  • Average US mDAU were 28 million for Q1, compared to 26 million in the same period of the previous year and compared to 27 million in the previous quarter.
  • Average international mDAU were 105 million for Q1, compared to 94 million in the same period of the previous year and compared to 99 million in the previous quarter.
• Average monthly active users (MAU) were 330 million for Q1, compared to 336 million in the same period of the previous year and compared to 321 million in the previous quarter.
  • Average US MAU were 68 million for Q1, compared to 69 million in the same period of the previous year and compared to 66 million in the previous quarter.
  • Average international MAU were 262 million for Q1, compared to 267 million in the same period of the previous year and compared to 255 million in the previous quarter.
  • As a reminder, this is the last quarter we will disclose MAU. We want to provide something valuable to people on Twitter every day, and we believe that mDAU, and its related growth, are the best ways to measure our success.

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Outlook

For Q2, we expect:

• Total revenue to be between $770 million and $830 million
• Operating income to be between $35 million and $70 million

For FY 2019, we expect:

• GAAP operating expenses to increase approximately 20% on a year-over-year basis in 2019 as we continue to invest for growth and support the top priorities we outlined at the beginning of the year: health, conversation, revenue product and sales, and platform
• Stock-based compensation expense to be in the range of $350 million to $400 million
• Capital expenditures to be between $550 million and $600 million

Note that our outlook for Q2 and the full year 2019 reflects foreign exchange rates as of April 2019.

For more information regarding the non-GAAP financial measures discussed in this press release, please see “Non-GAAP Financial Measures” and “Reconciliation of GAAP to Non-GAAP Financial Measures” below.

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