Twitter files IPO paperwork: revenue is growing fast, but it's not yet profitable
Twitter has made public its S1 filing, the document filed with the Securities and Exchange Commission which contains the financial details and user metrics of its business. It has 215 million monthly active users, as compared to Facebook's more than one billion. The company is not profitable. During the first six months of 2013 the company pulled in $253.6 million in revenue, but its net loss increased by 41% to $69.3 million."
There are two interesting numbers which will likely work in Twitter's favor. Only one third of its users are currently in the US, meaning it has plenty of room to grow at home. And 65 percent of its revenue comes from mobile advertising, besting its rivals like Facebook and LinkedIn. However, it can't boast big profits, as Facebook did when pitching its IPO.
The company actually filed for its IPO with the SEC all the way back in July, but didn’t reveal its plans until September. Twitter did this by taking advantage of a new "confidential" IPO process made possible by the passage of the JOBS Act.
Twitter hoped that by keeping its IPO confidential it could maintain a lower profile and avoid the disastrous, overhyped offering put on by its rival, Facebook. According to reports, the company has also done a good job helping employees and early investors to sell their equity before the IPO, meaning there won’t be a huge glut of stockholders trying to move their shares on the first day.
It’s also trying to avoid any late-breaking red flags, like the change Facebook made a few weeks before its IPO, where it noted a weakness its mobile ad business. Twitter does have the advantage of having been a mobile company from the start. Because of the confidential IPO filing, Twitter has had time to work privately with the SEC to shape the language and numbers in its S1.
The seven-year-old company, which began as a side project at a failed podcasting startup, has since become a premier global source of news and entertainment. Goldman Sachs is the lead underwriter for the IPO, although several other prominent investment banks are also involved. The company has over one thousand employees, although the exact number is not yet clear.
The company is hoping to raise $1 billion during the IPO.