5. Financial Analysis
Conduct a financial analysis for Twitter based on its revenue, profit, and key financial ratios (Provided in screenshots below ).
Evaluate the financial performance of Twitter using:
. Revenue (based on years 2013 through 2017) -- and its trend using CAGR calculation and what the trend implies
. Net income [or Net loss] (based on years 2013 through 2017) -- and its trend using CAGR calculation and what the trend implies
. Key financial ratios for 2016 and 2017 (include at least 3 key financial ratios, such as D/E ratio (i.e. Total liabilities / Total stockholders' equity), ROE (i.e. Net income (or Net loss)/Total stockholder's Equity), Current Ratio etc.) -- and their trends and what they imply
EXHIBITI Consolidated Statement of Operations: Fiscal Years 2013-2017 (in thousands, except per share data) Year Ended December 31. 2017 2016 2015 2014 2013 (in thousands, except per share data) Revenue $2,443,299 $2,529,619 $2,218,032 $1,403,002 $ 664,890 Costs and expenses Cost of revenue 861,242 932.240 729.256 446,309 266,718 Research and development 542,010 713,482 806,648 691,543 593.992 Sales and marketing 717,419 957,829 871,491 614,110 316,216 General and administrative 283,888 293.276 260,673 189,906 123,795 Total costs and expenses 2,404,559 2,896,827 2,668,068 1,941.868 1.300.721 Income (oss) from operations 38,740 (367 208) (450,036) (538,866) (635,831) Interest expense (105,237) (99.968) (98,178) (35,918) (7.576) Other income (expense), net (28,921) 26,342 14.909 13.567 13.739 Loss before income taxes (95,418) (440,834) (533,305) (578,351) (647,146) Provision (benefit) for income taxes 12,645 16.039 (12.274) (531) (1.823) Net loss $ (108.063) $ (456.873) $ (521,031) S (577.820) ${645,323) Net loss per share attributable to common stockholders: Basic and diluted (0.15) $ (0.65) $ 0.79) $ 1096) $ (3.41) Weighted average shares used to compute net loss per share attributable to common stockholders. Basic and diluted 732,702 702,135 662,424 604.990 189.510 Other Financial Information: Adjusted EBITDA $ 862,986 $ 751,493 $ 557,807 $ 300,896 $ 75,430 Non-GAAP net income foss) $ 328.859 $ 264,406 $ 180,486 $ 68,438 $ (19.057) Source: Twitter, Inc. Annual Report 2017 EXHIBIT 2 Twitter Inc.'s Consolidated Balance Sheets, 2016-2017 (in thousands, except par value) December 31 2017 December 31, 2016 $1,638,413 2,764,689 $ 988.598 2.785,981 664,268 254,514 5,321,884 773.715 49,654 1.188,935 78,289 $7.412,477 650,650 226,967 4,652,196 783.901 95,334 1.185,315 153,619 $6,870,365 Assets Current assets: Cash and cash equivalents Short-term investments Accounts receivable, net of allowance for doubtful accounts of $5,430 and $7.216 as of December 31, 2017 and December 31, 2016, respectively Prepaid expenses and other current assets Total current assets Property and equipment, net Intangible assets, net Goodwill Other assets Total assets Liabilities and stockholders' equity Current liabilities: Accounts payable Accrued and other current liabilities Capital leases, short-term Total current liabilities Convertible notes Capital leases, long-term Deferred and other long-term tax liabilities, net Other long-term liabilities Total liabilities Commitments and contingencies Stockholders' equity: Preferred stock. $0.000005 par value-200,000 shares authorized none issued and outstanding Common stock, $0.000005 par value-5,000,000 shares authorized: 746,902 and 721,572 shares issued and outstanding as of December 31, 2017 and December 31, 2016, respectively Additional paid.in capital Accumulated other comprehensive loss Accumulated deficit Total stockholders' equity Total liabilities and stockholders' equity $ 170,969 327,333 84,976 583,278 1.627.460 81,308 13,240 59.973 2,365,259 $ 122,236 380,937 80.848 584,021 1,538,967 66,837 7,556 68,049 2.265,430 7.750,522 (31,579) (2.671,729) 5,047,218 $7.412.477 7.224,534 (69.253) (2.550,350) 4,604.935 $6,870.365 Source: Twitter, Inc. Annual Report 2017 Twitter Inc. Advertising and Data Licensing Revenue, 2015-2016 (in thousands) Year Ended December 31, 2017 2016 2015 (in thousands) 2016 to 2017 % Change 2015 to 2016 % Change (6)% 13% vertising services ta licensing and other al revenue $2,109.987 333,312 $2,443,299 $2,248,052 281,567 $2,529,619 $1,994,036 223,996 $2,218,032 18% 26% (3)% 14% Compared to 2016. Revenue in 2017 decreased by $86.3 million compared to 2016. e: Twitter, Inc. 2017 Form 10-K. EXHIBIT 6 Selected Financial Data for Facebook, Inc., 2013-2017 (in millions, except per share data) 2017 Year Ended December 31, 2016 2015 2014 (in millions, except per share data) 2013 $17,928 $12,466 $ 7,872 $27,638 15,211 11,703 7,472 5,068 $40,653 20,450 20,203 20,594 12,427 6.225 4,994 2,804 6,194 4,910 2.754 Consolidated Statements of Income Data: Revenue Total costs and expenses In Income from operations Income before provision for income taxes Net income Net income attributable to Class A and Class B common stockholders Earnings per share attributable to Class A and Class B common stockholders: Basic Diluted 12,518 10,217 10.188 3,688 2.940 15,934 15,920 1,500 3,669 2,925 1.491 $5.49 $5.39 $1.31 $3.56 $3.49 $1.12 $1.10 $0.62 $0.60 $1.29 As of December 31, 2017 2016 2014 2013 2015 (in millions) $ 29,449 $ 18,434 $11.449 Consolidated Balance Sheets Data: Cash, cash equivalents, and marketable securities Total assets Total liabilities Total stockholders' equity $41.711 84,524 $ 11,199 39,966 64,961 49,407 17.858 10.177 5,767 5,189 3,870 2,388 74,347 59,194 44,218 36,096 15,470 Source: Facebook, Inc. 2017 Annual Report. EXHIBIT 7 Snap, Inc.: Selected Financial Data Year Ended December 31, 2017 2016 2015 (in thousands, except per share amounts) $ 824,949 $ 404,482 $ 58,663 717,462 451,660 182,341 1,534,863 82,235 27,216 148.600 Consolidated Statements of Operations Data: Revenue Costs and expenses: Cost of revenue Research and development Sales and marketing General and administrative Total costs and expenses Loss from operations Interest income Interest expense Other income (expense), net Loss before income taxes Income tax benefit (expense) Net loss Net loss per share attributable to Class A, Class B, and Class C common stockholders: Basic Diluted Adjusted EBITDA 440.392 (381,729) 183,676 124,371 165,160 924,867 (520,385) 4,654 522,605 1,535,595 4,310,525 (3,485,576) 21,096 (3,456) 4,528 (3,463,408) 1,399 (1,424) (4,568) (521,723) (152) (380,482) 18,342 7,080 7,589 $ (3,445,066) $ (514,643) $ (372,893) $(0.51) $(2.95) $(2.95) $(0.64) $(0.64) $ (459,243) $(0.51) $ (720,056) $ (292,898) CASE 13 Twitter Inc. in 2018: Too Little Too Late? C-147 December 31, 2017 2016 2015 (in thousands) na. n.a. $2,043,039 3,421,566 $ 987,368 1.722.792 n.a. Consolidated Balance Sheet Data: Cash, cash equivalents, and marketable securities Total assets Total liabilities Additional paid-in capital Accumulated deficit Total stockholders' equity 429,239 203,878 n.a. n.a. 7,634,825 (4,656,667) 2,728,823 (1,207,862) 1,518,914 n.a. 2.992,327 n.a. na. Not available Source: Snap Inc. Annual Report 2017. EXHIBITI Consolidated Statement of Operations: Fiscal Years 2013-2017 (in thousands, except per share data) Year Ended December 31. 2017 2016 2015 2014 2013 (in thousands, except per share data) Revenue $2,443,299 $2,529,619 $2,218,032 $1,403,002 $ 664,890 Costs and expenses Cost of revenue 861,242 932.240 729.256 446,309 266,718 Research and development 542,010 713,482 806,648 691,543 593.992 Sales and marketing 717,419 957,829 871,491 614,110 316,216 General and administrative 283,888 293.276 260,673 189,906 123,795 Total costs and expenses 2,404,559 2,896,827 2,668,068 1,941.868 1.300.721 Income (oss) from operations 38,740 (367 208) (450,036) (538,866) (635,831) Interest expense (105,237) (99.968) (98,178) (35,918) (7.576) Other income (expense), net (28,921) 26,342 14.909 13.567 13.739 Loss before income taxes (95,418) (440,834) (533,305) (578,351) (647,146) Provision (benefit) for income taxes 12,645 16.039 (12.274) (531) (1.823) Net loss $ (108.063) $ (456.873) $ (521,031) S (577.820) ${645,323) Net loss per share attributable to common stockholders: Basic and diluted (0.15) $ (0.65) $ 0.79) $ 1096) $ (3.41) Weighted average shares used to compute net loss per share attributable to common stockholders. Basic and diluted 732,702 702,135 662,424 604.990 189.510 Other Financial Information: Adjusted EBITDA $ 862,986 $ 751,493 $ 557,807 $ 300,896 $ 75,430 Non-GAAP net income foss) $ 328.859 $ 264,406 $ 180,486 $ 68,438 $ (19.057) Source: Twitter, Inc. Annual Report 2017 EXHIBIT 2 Twitter Inc.'s Consolidated Balance Sheets, 2016-2017 (in thousands, except par value) December 31 2017 December 31, 2016 $1,638,413 2,764,689 $ 988.598 2.785,981 664,268 254,514 5,321,884 773.715 49,654 1.188,935 78,289 $7.412,477 650,650 226,967 4,652,196 783.901 95,334 1.185,315 153,619 $6,870,365 Assets Current assets: Cash and cash equivalents Short-term investments Accounts receivable, net of allowance for doubtful accounts of $5,430 and $7.216 as of December 31, 2017 and December 31, 2016, respectively Prepaid expenses and other current assets Total current assets Property and equipment, net Intangible assets, net Goodwill Other assets Total assets Liabilities and stockholders' equity Current liabilities: Accounts payable Accrued and other current liabilities Capital leases, short-term Total current liabilities Convertible notes Capital leases, long-term Deferred and other long-term tax liabilities, net Other long-term liabilities Total liabilities Commitments and contingencies Stockholders' equity: Preferred stock. $0.000005 par value-200,000 shares authorized none issued and outstanding Common stock, $0.000005 par value-5,000,000 shares authorized: 746,902 and 721,572 shares issued and outstanding as of December 31, 2017 and December 31, 2016, respectively Additional paid.in capital Accumulated other comprehensive loss Accumulated deficit Total stockholders' equity Total liabilities and stockholders' equity $ 170,969 327,333 84,976 583,278 1.627.460 81,308 13,240 59.973 2,365,259 $ 122,236 380,937 80.848 584,021 1,538,967 66,837 7,556 68,049 2.265,430 7.750,522 (31,579) (2.671,729) 5,047,218 $7.412.477 7.224,534 (69.253) (2.550,350) 4,604.935 $6,870.365 Source: Twitter, Inc. Annual Report 2017 Twitter Inc. Advertising and Data Licensing Revenue, 2015-2016 (in thousands) Year Ended December 31, 2017 2016 2015 (in thousands) 2016 to 2017 % Change 2015 to 2016 % Change (6)% 13% vertising services ta licensing and other al revenue $2,109.987 333,312 $2,443,299 $2,248,052 281,567 $2,529,619 $1,994,036 223,996 $2,218,032 18% 26% (3)% 14% Compared to 2016. Revenue in 2017 decreased by $86.3 million compared to 2016. e: Twitter, Inc. 2017 Form 10-K. EXHIBIT 6 Selected Financial Data for Facebook, Inc., 2013-2017 (in millions, except per share data) 2017 Year Ended December 31, 2016 2015 2014 (in millions, except per share data) 2013 $17,928 $12,466 $ 7,872 $27,638 15,211 11,703 7,472 5,068 $40,653 20,450 20,203 20,594 12,427 6.225 4,994 2,804 6,194 4,910 2.754 Consolidated Statements of Income Data: Revenue Total costs and expenses In Income from operations Income before provision for income taxes Net income Net income attributable to Class A and Class B common stockholders Earnings per share attributable to Class A and Class B common stockholders: Basic Diluted 12,518 10,217 10.188 3,688 2.940 15,934 15,920 1,500 3,669 2,925 1.491 $5.49 $5.39 $1.31 $3.56 $3.49 $1.12 $1.10 $0.62 $0.60 $1.29 As of December 31, 2017 2016 2014 2013 2015 (in millions) $ 29,449 $ 18,434 $11.449 Consolidated Balance Sheets Data: Cash, cash equivalents, and marketable securities Total assets Total liabilities Total stockholders' equity $41.711 84,524 $ 11,199 39,966 64,961 49,407 17.858 10.177 5,767 5,189 3,870 2,388 74,347 59,194 44,218 36,096 15,470 Source: Facebook, Inc. 2017 Annual Report. EXHIBIT 7 Snap, Inc.: Selected Financial Data Year Ended December 31, 2017 2016 2015 (in thousands, except per share amounts) $ 824,949 $ 404,482 $ 58,663 717,462 451,660 182,341 1,534,863 82,235 27,216 148.600 Consolidated Statements of Operations Data: Revenue Costs and expenses: Cost of revenue Research and development Sales and marketing General and administrative Total costs and expenses Loss from operations Interest income Interest expense Other income (expense), net Loss before income taxes Income tax benefit (expense) Net loss Net loss per share attributable to Class A, Class B, and Class C common stockholders: Basic Diluted Adjusted EBITDA 440.392 (381,729) 183,676 124,371 165,160 924,867 (520,385) 4,654 522,605 1,535,595 4,310,525 (3,485,576) 21,096 (3,456) 4,528 (3,463,408) 1,399 (1,424) (4,568) (521,723) (152) (380,482) 18,342 7,080 7,589 $ (3,445,066) $ (514,643) $ (372,893) $(0.51) $(2.95) $(2.95) $(0.64) $(0.64) $ (459,243) $(0.51) $ (720,056) $ (292,898) CASE 13 Twitter Inc. in 2018: Too Little Too Late? C-147 December 31, 2017 2016 2015 (in thousands) na. n.a. $2,043,039 3,421,566 $ 987,368 1.722.792 n.a. Consolidated Balance Sheet Data: Cash, cash equivalents, and marketable securities Total assets Total liabilities Additional paid-in capital Accumulated deficit Total stockholders' equity 429,239 203,878 n.a. n.a. 7,634,825 (4,656,667) 2,728,823 (1,207,862) 1,518,914 n.a. 2.992,327 n.a. na. Not available Source: Snap Inc. Annual Report 2017
