10 tidbits from Twitter's IPO filing
- 04 October, 2013 01:26
Twitter made its IPO documents public Thursday and in the process revealed some juicy information about the company, like how much money it makes (or loses) and how much its executives get paid. Here are a few of the details we learned about Twitter today.
Dick Costolo, Twitter's CEO and a member of its board, received total compensation of US$11.5 million last year, including $200,000 in salary and $8.4 million in stock. That was a little more than the company's head of engineering, Chris Fry, whose total compensation was $10.3 million, including $10.1 million in stock.
Twitter's revenue ballooned in the past few years. Last year it was $317 million, three times what it was in 2011 ($106.3 million) and more than 10 times what it was three years ago ($28.3 million). But the growth has been slowing and it's still a minnow compared with Facebook, whose revenue last year was $5.1 billion.
Lots of red ink
Twitter lost money in each of the last three years -- $79 million last year, $128 million in 2011, and $67 million in 2010. Things might not get better any time soon: it lost $69 million in the first six months this year, and the "restricted stock units" it has granted will have "a significant negative impact on our ability to achieve profitability on a GAAP basis in 2013 and 2014," the company said.
GAAP, or generally accepted accounting principles, doesn't take into account unusual charges that can affect a business in any given year. But Twitter revealed it has been losing money on a non-GAAP basis, too.
Where does the money come from?
Twitter gets 85 percent of its revenue from ad services, most of that from Promoted Tweets, Promoted Accounts and Promoted Trends. The rest comes from data licensing, in which other companies pay to access, search and analyze its tweets, typically under two-year agreements.
Who owns Twitter today?
Cofounder and former CEO Evan Williams holds the biggest chunk of the company's stock, with 12 percent, or about 57 million shares. Peter Fenton, a board member and early investor, owns 6.7 percent, while Jack Dorsey, another founder and the board chairman, has 4.9 percent. Biz Stone, the other cofounder, is not listed as a significant shareholder.
More than three-quarters of Twitter's monthly users were outside the U.S. last quarter, but only a quarter of its revenue was "international." It said it's been focusing its investments lately on Australia, Brazil, Canada, Japan and the United Kingdom
How many users?
Twitter had 218 million monthly users last quarter. Facebook had 845 million when it went public last February, and today it has 1.2 billion.
Mobile was a serious weak point for Facebook when it went public, but it does not appear to be for Twitter. In the three months from April to June, 75 percent of Twitter's average monthly active users accessed the service from phones and tablets, and more than 65 percent of its ad revenue came from mobile.
The big ones are obvious, like Facebook (which got nine mentions in the filing), Google, LinkedIn, Microsoft and Yahoo. But Twitter also listed local rivals it will have to battle internationally: China's Sina Weibo, Japan's Line and South Korea's Kakao.
Companies have to disclose the major risks to their business when they go public; Twitter's went on for 31 pages. Among them: failure to grow its user base, loss of ad revenue, competitors, failure to expand internationally, technical problems, government restrictions on its service (it's blocked in China), and bad publicity.