People are at the heart of Twitter, the company’s SEC filing says. The company has achieved significant reach globally and continues to grow with more than 215 million monthly active users and more than 100 million daily active users tweeting 500 million times daily, spanning nearly every country worldwide. Anyway you cut it, Twitter is now a household name and a critical tool for millions of people all over the world. Presidents, heads of state and celebrities are users of this communication tool.
Growth in acceptance of Twitter has translated into strong and rapid revenue growth from 2011 to 2012 increasing by 198 percent to $316.9 million, while net loss declined by 38 percent to $79.4 million and adjusted EBITDA increased by 149 percent to $21 million. For the six months ended June this year, revenue increased by 107 percent to $253.6 million over the same period in 2012, net loss increased by 41 percent to $69.3 million and adjusted EBITDA increased by $20.7 million to $21.4 million.
Since inception, Twitter accumulated deficits of $418.6 million. Although revenue has grown rapidly, increasing from $28.3 million in 2010 to $316.9 million in 2012, Twitter says that they expect that the revenue growth rate will slow in the future as a result of a variety of factors, including the gradual slowdown in the growth rate of user base. Future revenue growth will depend on, among other factors, ability to attract new users, increased user engagement and ad engagement, increased brand awareness, to compete effectively, maximize sales efforts, demonstrate a positive return on investment for advertisers, and successfully develop new products and services to expand internationally.
According to the company, “The net proceeds from the sale of our shares of our common stock by us in this offering may be used for general corporate purposes, including working capital, operating expenses and capital expenditures.” Twitter anticipates making capital expenditures in 2013 of approximately $225 million to $275 million and they may use a portion of the net proceeds to fund anticipated capital expenditures and to acquire other businesses, products, services or technologies and other working capital needs.
Sources suggest that the IPO is set to raise at least $1 billion for the company which should take place within a few weeks when the issue price would be set.
