Twitter, Inc. (NYSE:TWTR) Q3 2017 Earnings Conference Call - Final Transcript

Oct 26, 2017 • 08:00 am ET

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Twitter, Inc. (NYSE:TWTR) Q3 2017 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, and welcome to the Twitter Third Quarter 2017 Earnings Conference Call.

(Operator Instructions)

I would now like to turn the call over to your host, Krista Bessinger, Senior Director, Investor Relations. Please go ahead.

Executive
Krista Bessinger

Hi, everyone, and thanks for joining our Q3 earnings conference call. We have with us today our CEO, Jack Dorsey; COO, Anthony Noto; and CFO, Ned Segal.

We hope you've had a chance to read our shareholder letter published on our Investor Relations website this morning. Like last quarter, we'll begin with just a few prepared remarks before opening the call directly to your questions. During the Q&A, we'll take questions asked via Twitter, in addition to questions from conference call participants. Questions submitted via Twitter should be directed to @TwitterIR using the hashtag #TWTR.

(Forward-Looking Cautionary Statements)

Also, during this call, we will discuss certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are included in our shareholder letter. These non-GAAP measures are not intended to be a substitute for our GAAP results.

And finally, this call in its entirety is being webcast from our Investor Relations website, and an audio replay of this call will also be available via Twitter and on our website in a few hours.

And with that, I would like to turn it over to Jack.

Executive
Jack Dorsey

Good morning, everyone, and thank you for joining us today. Before we take questions, I want to highlight a few things. We had a good quarter and made progress in three key areas of our business. We grew our audience and engagement, made progress on a return to revenue growth and achieved record profitability. I'll outline these in a bit more detail for you.

First, our audience and engagement are growing. Our monthly and daily active usage grew year-over-year as well as sequentially. Importantly, this growth was broad based, both in the United States and internationally, with growth in the majority of our top 10 markets. And as we said last quarter, product improvements continue to drive audience and engagement growth. Our work to increase relevance and make Twitter easier is making an impact.

Second, this quarter, we made progress on a return to revenue growth. Growth was driven by improved execution from our sales team, strength in video and direct response ad formats and continued strength in our data business, where we saw our third consecutive quarter of accelerating growth.

And third, we achieved record profitability in Q3. We continued to improve our GAAP net margin and delivered our highest adjusted EBITDA margin to date. This profitability reflects our improved prioritization and disciplined execution across all of our strategic priorities.

In addition to the progress we made in audience and engagement growth, revenue growth and profitability, we're more focused than ever on making Twitter a safe place for everyone. We made this a priority in 2016, updating our policies and increasing the size of our teams. And in 2017, we rolled out a number of