Financial Analysis
Twitter Case:Twitter Inc. in 2018: Too Little Too Late?
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:
5.1 Revenue (based on years 2013 through 2017) -- and its trend using CAGR calculation and what the trend implies
5.2 Net income [or Net loss] (based on years 2013 through 2017) -- and its trend using CAGR calculation and what the trend implies
5.3 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
5.4 What is your conclusion on Twitters overall financial performance?
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) $2,443,299 $2,529,619 $2.218,032 $1,403,002 $ 664,890 Revenue Costs and expenses Cost of revenue Research and development Sales and marketing General and administrative Total costs and expenses Income (loss) from operations Interest expense Other income (expense), net Loss before income taxes Provision (benefit) for income taxes Net loss Net loss per share attributable to common stockholders: Basic and diluted Weighted average shares used to compute net loss per share attributable to common stockholders. Basic and diluted Other Financial Information: Adjusted EBITDA Non-GAAP net income foss) 861,242 932.240 729,256 446,309 266,718 542,010 713,482 806,648 691,543 593,992 717,419 957,829 871,491 614,110 316,216 283,888 293.276 260,673 189.906 123.795 2,404,559 2,896,827 2.668,068 1.941.868 1.300.721 38,740 (367 208) (450,036) (538,866) (635,831) (105,237) 199,968) (98,178) (35,918) (7.576) (28,921) 26,342 14,909 (3,567 (3.739 (95,418) (440,834) (533,305) (578,351) (647,146) 12.645 16,039 (12.274) 531 (1.823 $ (108,063) $ (456,873) $ (521,031) S (577,820) $(645,323) $ (0.15) $ (0.65) $ (0.79) $ 10.96) $ 3.41) 732,702 702,135 662,424 604.990 189.510 $ 300.896 $ 862,986 $ 328,859 $ 751,493 $ 264,406 $ 557,807 $ 180,486 $ 75,430 $ (19,057) $ 68,438 EXHIBIT 2 Twitter Inc.'s Consolidated Balance Sheets, 2016-2017 (in thousands, except par value) December 31, December 31, 2017 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 HIBIT 4 Twitter Inc. Advertising and Data Licensing Revenue, 2015-2016 (in thousands) Year Ended December 31, 2017 2016 2016 to 2017 % Change 2015 to 2016 % Change 2015 (in thousands) (6)% 13% vertising services ta licensing and other al revenue $2,109,987 $2,248,052 333,312 281,567 $2,443,299 $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. 2: Twitter, Inc. 2017 Form 10-K. EXHIBIT 6 Selected Financial Data for Facebook, Inc., 2013-2017 (in millions, except per share data) Year Ended December 31, 2017 2013 2016 2015 2014 (in millions, except per share data) 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 $40,653 20,450 20,203 20,594 $27,638 15,211 12,427 12,518 $17,928 11.703 6,225 6,194 $12,466 7,472 4,994 $ 7,872 5,068 2,804 4,910 2,754 15,934 10,217 3,688 2.940 1,500 15,920 10.188 3,669 2.925 1.491 EXHIBIT 6 Selected Financial Data for Facebook, Inc., 2013-2017 (in millions, except per share data) Year Ended December 31, 2017 2016 2015 2014 2013 (in millions, except per share data) $12,466 $ 7,872 $40,653 20,450 $17,928 11,703 6,225 7,472 5,068 20,203 4,994 2,804 $27,638 15,211 12,427 12,518 10,217 10.188 20,594 6,194 4,910 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 2,754 15,934 2.940 1,500 3,688 3,669 15,920 2.925 1.491 $5.49 $5.39 $3.56 $3.49 $1.31 $1.29 $1.12 $1.10 $0.62 $0.60 As of December 31, 2017 2016 2015 2014 2013 (in millions) Consolidated Balance Sheets Data: Cash, cash equivalents, and marketable securities Total assets Total liabilities Total stockholders' equity $41.711 84,524 $ 29,449 $ 18,434 $11.199 $11,449 64,961 49,407 39.966 17,858 5,767 5.189 3,870 2,388 59,194 44,218 36,096 15,470 10.177 74,347 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 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 717,462 1,534,863 522,605 1,535,595 4,310,525 (3,485,576) 21,096 (3,456) 451,660 183,676 124,371 165,160 924,867 (520,385) 182.341 82,235 27,216 148,600 440.392 (381,729) 1,399 4,654 (1,424) 4,528 (3,463,408) 18,342 $ (3,445,066) (4,568) (521,723) 7,080 $ (514,643) (152) (380,482) 7,589 $ (372,893) Diluted $12.95) $(2.95) $ (720,056) $(0.64) $(0.64) $ (459,243) $(0.51) $(0.51) $(292.898) Adjusted EBITDA Diluted Adjusted EBITDA $(2.95) $ (720,056) $(0.64) $ (459,243) $(0.51) $(292,898) CASE 13 Twitter Inc. in 2018: Too Little Too Late? C-147 December 31, 2017 2016 2015 (in thousands) na. n.a. 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 n.a. $2,043,039 3,421,566 429,239 7,634,825 (4,656,667) 2,992,327 $ 987,368 1,722,792 203,878 2,728,823 (1,207,862) 1.518,914 n.a. n.a. n.a. n.a. 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) $2,443,299 $2,529,619 $2.218,032 $1,403,002 $ 664,890 Revenue Costs and expenses Cost of revenue Research and development Sales and marketing General and administrative Total costs and expenses Income (loss) from operations Interest expense Other income (expense), net Loss before income taxes Provision (benefit) for income taxes Net loss Net loss per share attributable to common stockholders: Basic and diluted Weighted average shares used to compute net loss per share attributable to common stockholders. Basic and diluted Other Financial Information: Adjusted EBITDA Non-GAAP net income foss) 861,242 932.240 729,256 446,309 266,718 542,010 713,482 806,648 691,543 593,992 717,419 957,829 871,491 614,110 316,216 283,888 293.276 260,673 189.906 123.795 2,404,559 2,896,827 2.668,068 1.941.868 1.300.721 38,740 (367 208) (450,036) (538,866) (635,831) (105,237) 199,968) (98,178) (35,918) (7.576) (28,921) 26,342 14,909 (3,567 (3.739 (95,418) (440,834) (533,305) (578,351) (647,146) 12.645 16,039 (12.274) 531 (1.823 $ (108,063) $ (456,873) $ (521,031) S (577,820) $(645,323) $ (0.15) $ (0.65) $ (0.79) $ 10.96) $ 3.41) 732,702 702,135 662,424 604.990 189.510 $ 300.896 $ 862,986 $ 328,859 $ 751,493 $ 264,406 $ 557,807 $ 180,486 $ 75,430 $ (19,057) $ 68,438 EXHIBIT 2 Twitter Inc.'s Consolidated Balance Sheets, 2016-2017 (in thousands, except par value) December 31, December 31, 2017 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 HIBIT 4 Twitter Inc. Advertising and Data Licensing Revenue, 2015-2016 (in thousands) Year Ended December 31, 2017 2016 2016 to 2017 % Change 2015 to 2016 % Change 2015 (in thousands) (6)% 13% vertising services ta licensing and other al revenue $2,109,987 $2,248,052 333,312 281,567 $2,443,299 $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. 2: Twitter, Inc. 2017 Form 10-K. EXHIBIT 6 Selected Financial Data for Facebook, Inc., 2013-2017 (in millions, except per share data) Year Ended December 31, 2017 2013 2016 2015 2014 (in millions, except per share data) 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 $40,653 20,450 20,203 20,594 $27,638 15,211 12,427 12,518 $17,928 11.703 6,225 6,194 $12,466 7,472 4,994 $ 7,872 5,068 2,804 4,910 2,754 15,934 10,217 3,688 2.940 1,500 15,920 10.188 3,669 2.925 1.491 EXHIBIT 6 Selected Financial Data for Facebook, Inc., 2013-2017 (in millions, except per share data) Year Ended December 31, 2017 2016 2015 2014 2013 (in millions, except per share data) $12,466 $ 7,872 $40,653 20,450 $17,928 11,703 6,225 7,472 5,068 20,203 4,994 2,804 $27,638 15,211 12,427 12,518 10,217 10.188 20,594 6,194 4,910 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 2,754 15,934 2.940 1,500 3,688 3,669 15,920 2.925 1.491 $5.49 $5.39 $3.56 $3.49 $1.31 $1.29 $1.12 $1.10 $0.62 $0.60 As of December 31, 2017 2016 2015 2014 2013 (in millions) Consolidated Balance Sheets Data: Cash, cash equivalents, and marketable securities Total assets Total liabilities Total stockholders' equity $41.711 84,524 $ 29,449 $ 18,434 $11.199 $11,449 64,961 49,407 39.966 17,858 5,767 5.189 3,870 2,388 59,194 44,218 36,096 15,470 10.177 74,347 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 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 717,462 1,534,863 522,605 1,535,595 4,310,525 (3,485,576) 21,096 (3,456) 451,660 183,676 124,371 165,160 924,867 (520,385) 182.341 82,235 27,216 148,600 440.392 (381,729) 1,399 4,654 (1,424) 4,528 (3,463,408) 18,342 $ (3,445,066) (4,568) (521,723) 7,080 $ (514,643) (152) (380,482) 7,589 $ (372,893) Diluted $12.95) $(2.95) $ (720,056) $(0.64) $(0.64) $ (459,243) $(0.51) $(0.51) $(292.898) Adjusted EBITDA Diluted Adjusted EBITDA $(2.95) $ (720,056) $(0.64) $ (459,243) $(0.51) $(292,898) CASE 13 Twitter Inc. in 2018: Too Little Too Late? C-147 December 31, 2017 2016 2015 (in thousands) na. n.a. 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 n.a. $2,043,039 3,421,566 429,239 7,634,825 (4,656,667) 2,992,327 $ 987,368 1,722,792 203,878 2,728,823 (1,207,862) 1.518,914 n.a. n.a. n.a. n.a. Not available Source: Snap Inc. Annual Report 2017
