Twitter Revenue and Profit

Twitter revenue has continued to grow, from $122.4M the first half of 2012 to $253.6M the same period this year. The company however has yet to make a profit, posting a net loss of $49.1M the first half of 2012 and widening its loss to $69.3M the first half of this year.

Before the filing was public:

There is little information on Twitters financials because the company filed for a secret IPO, whereby the S-1 is filed with the SEC but not available to the public. What is certain is that revenue was less than $1bn last year because that is the threshold under which a company can file for a secret IPO. However, given the high grow rate, the run rate of the companys revenue will not take long to exceed that mark. Estimates put Twitters 2013 revenues at $583m but for actual results we need to wait for the registration statement. We are also missing any information on profits. Watch out for the Summary consolidated financial data section in the S-1.

In any event, growth in operational metrics such as engagement and number of active users are more important for the current life stage of Twitter. The S-1 will detail these metrics, which will also give insight into how management thinks about the company.

Ticker

Twitter chose TWTR for its stock symbol.

Before the filing was public:

There are no rumors or statement by Twitter regarding ticker choice yet. The initial version of the S-1 might omit the ticker, which the company could add in later amendments of the filing.

Stock Exchange

The S-1 did not reveal which stock exchange will get the listing.

Before the filing was public:

NYSE seems to have won the listing over NASDAQ, which is home to most technology stocks. NASDAQ boasts the 2012 high profile tech listing Facebooks IPO which however left the exchange with damaged reputation and a fine to pay after mistakes in processing initial trading caused investor anger.

Share Price and Valuation 

Bloomberg calculates  that the S-1 implies $12.8bn valuation for Twitter. This valuation is lower than the rumored $15bn or more.

Before the S-1 was public:

Rumors expect Twitter to go public at $28-30 per share, implying $15-16 billion valuation for the social network. Again, this information may appear only in the latest amendments to the S-1 filing.

Bankers

Goldman Sachs, JP Morgan and Morgan Stanley retain their expected key role. The latest addition to the bank roster was Allen & Co.

Before the S-1 filing was public:

Goldman Sachs has secured the lead left position on the front page of the S-1, and JP Morgan and Morgan Stanley, which was lead-left for Facebook, will also help in the IPO process. Twitter will likely add more to banks as it near pricing to reach more investors.

Selling Stockholders

The first public version of the S-1 does not reveal who will sell shares and how many.

Before the filing was public:

Twitters co-founders Jack Dorsey, Biz Stone and Ev Williams will likely sell some of their ownership but there is a long list of early employees and investors that can realize the good paper returns that they have been sitting on until the initial public offering.

Voting Agreements

Twitter decided to use a single-class voting structure giving each share one vote. This approach contrasts with that of other tech companies such as Google and Facebook, where founders keep disproportionate voting share.

Before the public filing:

The company might go for a dual-class share structure, giving founders disproportionately more voting rights than their share count ownership.

Other IPO Information

The S-1 filing will eventually reveal what part of the company will be sold and whether the company will sell new shares. Twitter intends to use the IPO proceeds for general corporate purposes.

Twitters Risk Factors

Twitters risk factors will likely revolve around monetization and competition. In addition, consumers shift to mobile and away from desktop will certainly make an appearance. Facebooks shares plunged after its IPO partly because of investor concern that the company cannot monetize its mobile users as well as desktop users. Further, the emergence of mobile-first and mobile-only competitors will likely rank among the top risk factors.

The risk factor section is among the most critical parts of any S-1 so much of the analysis will focus here now that the S-1 filing is public.

Other Twitter Filings

Twitter does have previous filings, which it filed in each year between 2007 and 2011. The company filed forms REGDEX, D and NO ACT. These filings were related to the companys fundraising from venture capital investors so we could learn little about Twitter itself from them. Twitter has not yet filed any 10-K annual reports or 10-Q quarterly reports, which would have revealed its financials. Much of the changes around the company, such as new user interface or introduction of ads, are visible and widely publicized. However, without SEC filings with financials, no one outside of the company knows their actual financial impact.

Amendments

The company will make amendments to its initial S-1 filing as it progresses through the IPO process. We will keep track of the changes and update this post.

S-1 Exhibits

Twitter filed numerous exhibits along with the main filing. In fact, this additional information accounts for about three quarters of all the pages that the company filed with the SEC. You can save these exhibits as PDF too as described above.