https://investor.twitterinc.com/releasedetail.cfm?ReleaseID=...
Non-GAAP is still a sham in this case, because ignoring employee stock compensation to boost your earnings is like ignoring employee salaries to boost your earnings. It does not make sense for anything other than attempting to deceive investors.
Non-GAAP numbers are almost always done to deceive investors. In the dot-com days, it was EBITDA. These days, it's earnings before stock-based compensation.
I posted this in another thread, but they acknowledged this situation in their S-1 (from last September).
Following the completion of this offering, the stock-based compensation expense related to Pre-2013 RSUs and other outstanding equity awards will have a significant negative impact on our ability to achieve profitability on a GAAP basis in 2013 and 2014.
http://www.sec.gov/Archives/edgar/data/1418091/0001193125134...
Then Twitter should restate its non-GAAP results for 2009-2013 to subtract out the stock grants from previous quarters' results.
The numbers have to add up. If you exclude something from the non-GAAP results for one quarter, then it has to appear in the non-GAAP results for another quarter. The money cannot simply disappear into thin air.
If a company reports non-GAAP results, then it should be required to report a cumulative difference vs. GAAP. Over time, the cumulative difference should go to zero, as the timing differences are worked out.
1) 266M on content acquisition 2) 600M on R & D 3) 312M on on sales and marketing 4) 123M on general administration
If this is not a Ponzi scheme, I don't know what is.
Oh, by the way, please down vote me for citing these numbers.
Just poking at your numbers a bit, of that 600M in R&D, 379M was from stock based compensation that hit them in the 4th quarter because of the IPO (they had to expense the RSUs at that point). Don't you think it's a little strange that $400M of the $600M in R&D costs were accrued in the 4th quarter?
I'm not advocating buying Twitter stock. Just trying to counter some of the overzealous cynicism in this thread.
Year 2012: revenue 316M, cost & expenses: 394M
Year 2013: revenue 664M, cost & expenses: 1300M
year over year, revenue increases 2 folds, cost increases more than 3 times. Does that answer your question? You could also break it down by quarters, but the same trend is still there.
Many of the VCs get in on the A-round, pump it up to the next VCs for the B-round, pump it up get it to IPO, and then they have their liquidity event where everyone cashes out.
The biggest thing that irks me is tech companies reporting non-GAAP numbers as their top-line results on earnings reports. These are baked-up numbers to make companies' large losses (or possibly small profits) look deceptively better than they actually are.