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Twitter Q2 Profit Matches Estimates; Shares Tumble On Lower Monthly Usage

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Twitter, Inc. (TWTR) reported second-quarter non-GAAP net income per share of $0.17 compared to $0.08, prior year. On average, 33 analysts polled by Thomson Reuters expected the company to report profit per share of $0.17 for the quarter. Analysts' estimates typically exclude special items. Non-GAAP net income was $134 million compared to $56 million, prior year. Adjusted EBITDA was $265 million compared to $178 million, previous year.

Second-quarter GAAP net income was $100 million or $0.13 per share, including $42 million net tax benefit primarily driven by the release of a valuation allowance for Brazil, compared to a net loss of $116 million in the previous year.

Second-quarter revenue totaled $711 million, an increase of 24% year-over-year, or an increase of 27% year-over-year when excluding the approximately $14 million of revenue in prior year quarter from fully-deprecated TellApart product. Analysts expected revenue of $696.23 million for the quarter. Advertising revenue totaled $601 million, an increase of 23% year-over-year. Data licensing and other revenue totaled $109 million, an increase of 29% year-over-year.

For the second-quarter, average monthly active users were 335 million, compared to 326 million in the same period of the previous year and compared to 336 million in the previous quarter, reflecting the impact from decisions the company has made to not move to paid SMS carrier relationships, prioritizing the health of the platform, and, to a lesser extent, GDPR. Average daily active users increased 11% year-over-year, during the quarter.

For third-quarter, the company expects: adjusted EBITDA to be between $215 million and $235 million; adjusted EBITDA margin to be between 33% and 34%; and stock-based compensation expense to be in the range of $85 million to $90 million.

For fiscal 2018, the company expects: stock-based compensation expense to be in the range of $300 million to $350 million; and capital expenditures to be between $450 million and $500 million.

Shares of Twitter, Inc. were down more than 20% in pre-market trade on Friday.

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