Source: Seeking Alpha
Twitter, Inc. (NYSE:TWTR)
Q2 2014 Earnings Conference Call
July 29, 2014 5:00 PM ET
Dick Costolo – CEO
Mike Gupta – CFO and SVP, Strategic Investments
Anthony DiClemente – Nomura Securities
Douglas Anmuth – JPMorgan
Heath Terry – Goldman Sachs
Peter Stabler – Wells Fargo Securities
Justin Post – Bank of America Merrill Lynch
Eric Sheridan – UBS
Youssef Squali – Cantor Fitzgerald
Mark Mahaney – RBC Capital Markets
Brian Wieser – Pivotal Research
Dan Salmon – BMO Capital Markets
Ben Schachter – Macquarie Capital
Carlos Kirjner – Sanford C. Bernstein
Arvind Bhatia – Sterne Agee
Brian Nowak – Susquehanna Financial Group
Good day, ladies and gentlemen and welcome to the Twitter Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) As a reminder, this conference call is being recorded. I would now like to introduce your host for today’s conference Krista Bessinger, Senior Director of Investor Relations. Ma’am you may begin.
Thanks, Sam and good afternoon. Welcome to our Q2 earnings call and thank you for joining us. We have with us today our CEO, Dick Costolo; Current CFO and SVP of Strategic Investments, Mike Gupta and incoming CFO, Anthony Noto. We’ll begin with approximately 15 minutes of prepared remarks followed by Q&A. During the Q&A, we will take questions submitted via Twitter in addition to questions from conference call participants. Questions submitted via Twitter should be directed to @TwitterIR using the #TWTRearnings.
We’d like remind everyone that we will be making forward-looking statements on this call, such as our outlook for Q3 and 2014 and our operational plans and strategies. Actual results could differ materially from those contemplated by our forward-looking statements, and reported results should not be considered as an indication of future performance. Please take a look at our filings with the SEC for a discussion of the factors that could cause our results to differ materially. The forward-looking statements on this call are based on information available to us as of today’s date, and we disclaim any obligation to update any forward-looking statements except as required by law.
During this call, we will discuss certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are provided in our earnings release. These non-GAAP measures are not intended to be a substitute for our GAAP results. Also, please see our earnings slide deck posted on our IR site for additional information about metrics we will discuss on this call. An audio replay of this call will also be available via Twitter and on our Web site in a few hours.
And with that, I would like to turn the call over to our CEO, Dick Costolo.
Dick Costolo – CEO
Thanks, everyone for joining us this afternoon. We had a strong quarter. We made progress on multiple fronts across the business and our financial performance was truly exceptional. I would like to run through a few highlights here and then we can dive into the details. We generated $312 million in revenue which represents 124% growth on a year-on-year basis, that’s our fourth consecutive quarter of accelerating revenue growth. Ad revenue growth also continues to be remarkably strong, and accelerating to 129% year-over-year. That growth is primarily driven by higher engagement which translates into improved ROI for our marketers.
Our monthly active users also grew to 271 million in the quarter, an increase of 16 million, the highest number of absolute net new user adds in five quarters. And then finally, we generated $54 million in adjusted EBITDA, more than doubling margins year-over-year to 17%. Later on the call, Mike will provide more details on this past quarter’s results and Anthony will talk more about our going forward outlook. I would like to start by talking a little bit about the progress we are making on our consumer products.
First, during the World Cup, we delivered a kind of events experience that I have wanted to see from us for some time. We served up tailored experiences for each individual match and for the overall World Cup and these experiences felt alive. They felt wonderfully complementary to the matches themselves. That has given me confidence that we can create great user experiences by organizing content around topics and live events. Second, we have a team focused specifically on building a fast and frictionless Twitter experience for users in geographies with sub-optimal connectivity. We are seeing really positive results from the work there and I am excited about our growth opportunity in developing markets around the world.
I want to continue to highlight the reach and impact of Twitter across the mobile landscape beyond our owned and operated properties. As one example, during the Germany-Brazil World Cup game alone, we had approximately 2 billion Tweet impressions off of Twitter in addition to the 4.4 billion impressions on Twitter’s owned and operated properties. So, it’s nearly 6.5 billion impressions in a single match, highlights the continued expansion of our global reach and impact.
And beyond our 271 million monthly active users, there are hundreds of millions of additional unique visitors who come to Twitter every month but don’t log-in. When you consider the combination of monthly active users and unique visitors, the size of our audience on our owned and operated properties is two to three times that of just our monthly active user base, which we believe ranks us among the top-10 largest digitally connected audiences in the world.