Twitter Q2 2019 Earnings Report SAN FRANCISCO, CALIFORNIA July 26, 2019

PRESENTATION

Operator Good day ladies and gentlemen and welcome to Twitter's Second Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. I would now like to turn the call over to your host Krista Bessinger Vice President Investor Relations. Please go ahead.

Krista Bessinger Twitter, Inc. - VP, IR Hi, everyone, and thanks for joining our Q2 earnings conference call. We have Jack and Ned with us today. But before they get start, I wanted to cover a few housekeeping items. First, please note that as of Q2 we will no longer be providing a slide deck as part of our quarterly disclosure package.

All information that was previously provided in our slide deck is now available in the selected company metrics and financials PDF which is posted on our IR site. Next I just want to remind everyone of the format for our call. We published a shareholder letter on our Investor Relations website and with the SEC about an hour ago and hope everyone had a chance to read it. Because the letter has a lot of detail, we will keep our opening remarks brief and then dive right into your questions. We will also take questions asked on Twitter, so please Tweet us at @TwitterIR using the $TWTR.

Also during this call, we will make forward-looking statements. Those are things like our outlook for Q3 and the full year of 2019 and our operational plans and strategies. Our actual results could differ materially from those contemplated by our forward-looking statements and you should not consider our reported results as an indication of future performance.

We're making these forward-looking statements based on information available to us as of today and we disclaim any duty to update them later unless required by law. Please take a look at our filings with the SEC especially in the Risk Factors section in our most recent 10-K and in our 10- Qs for a discussion of the factors that could cause our results to differ.

Also during this call, we will discuss certain non-GAAP financial measures. We have reconciled those to the most directly comparable GAAP financial measures 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 will be available on Twitter and on our website in a few hours.

1 And with that, I'd like to turn it over to Jack.

Jack Dorsey Twitter, Inc. - CEO Thanks Krista. Good morning everyone. Thanks for joining us today. Before we get into your questions we want to make a few remarks. Q2 was a really strong quarter for us. We had revenue increase 18% year-over-year and monthly daily active growth accelerating to 14%. Really proud of our results and also the work and the effort that went into it.

As you all know, health of the public conversation remains our top priority. Our focus in this quarter was ensuring that our rules and how we enforce them are easy to understand. This quarter we refreshed our rules with simple and clear language. We expanded our rules against hateful conduct to include language that dehumanizes others on the basis of religion. And we defined content that is of public interest on Twitter and introduced a new notice that provides additional clarity when we leave up certain Tweets that violate our rules.

And an initiative that has been really important to us and one we've made a lot of progress on is to proactively identify and address malicious behavior. This means removing the burden from the victims of abuse and harassment on our service and proactively identifying those Tweets and making sure that our agents are well equipped to take actions on them.

This resulted in an 18% drop in reports of spammy or suspicious behavior across all Tweet detail pages which are the pages that show the replies to any given Tweet on our service. In the consumer app we're moving a lot faster and we're seeing some much larger gains. We're providing more relevant content in people's timelines based on what they're engaging with in near real time.

We're experimenting with new ways to customize the timeline, making it much easier for people to follow what's happening within their specific interests, this time using lists they've created or to which they have subscribed. And we've been making a lot of progress on international as well, breaking news alerts is one example. We're delivering push notifications as breaking events happen in real time which is now available in more than 10 countries. And we're enabling people to select the preferred language in the onboarding flow and on the settings page allowing people to explicitly set which language they want to see content in. This is currently live on Android in 13 countries and rolling out on iOS soon.

Another big initiative for us has been to make Twitter feel more conversational. We've been working to label replies in a clear way, testing ways to make it easier to follow and join conversation with replies for various participants in a conversation including the author mentioned and following. And our prototype app twttr, which we call little t, has been moving quickly. We launched four iterations in this quarter, quickly learning and refining with each iteration. One example recently is people were finding it difficult to quickly like replies, so we added a swipe to like gesture for a fast way to like replies. This was well received, so we added support for swipe to like for all Tweets in the prototype app.

2 We continue to learn from this prototype or iterations and believe we're getting closer to launching a new experience in the main Twitter app that will make conversations much easier to follow and participate in.

And with that, I'll hand it over to Ned.

Ned D. Segal Twitter, Inc. - CFO Thanks Jack. Before we get into Q&A, I just wanted to highlight a couple of points. We feel good about our performance in Q2 with DAU growth of 14% and revenue up 18% or 20% on a constant currency basis with particular strength in the United States. We're also very pleased with the pace of hiring, up 20% year-over-year in Q2, which is an acceleration from 18% last quarter. We now expect full year headcount growth of approximately 20% in 2019.

The combination of our conviction and our strategy and execution and our ability to recruit and retain key talent is allowing us to increase headcount growth. We continue to expect GAAP operating expenses for the full year to grow approximately 20% year-over-year with expenses ramping over the course of the year.

You'll note that our guidance range for Q3 reflects lower revenue growth than we delivered in the first half of 2019. This is driven by a couple of factors. The first is the comparison we faced as we lap our global business recovery in the second half of last year. As you may remember, we've got particularly difficult comps in the US and Japan, our two largest markets, 28% and 24% in the United States and 44% and 30% in Japan in Q3 and Q4.

The second is the recent decisions that we made to deprecate certain legacy ad formats in order to better serve our customers and drive greater focus in revenue product, increasing the stability, performance and scale of our ads platform in general and our mobile application download product in particular will take place over multiple quarters with a gradual impact on revenue. We're confident that focusing on our most important products delivering higher performing, better formats for our customers and creating a path to more direct response ads over time will deliver better outcomes for all of our stakeholders for years to come, but it does require focus and tough near-term decisions. With that, we're ready to take your questions. Operator?

QUESTIONS AND ANSWERS Doug Anmuth - JP Morgan Chase & Co Thanks for taking the question. Jack, you're coming up on two years of the heavy health work efforts here on the platform. Can you just talk about how you would characterize your success so far in improving safety and security? And do you think that you've turned the corner on health work from weighing on user growth to now helping actually drive user growth? Thanks.

Jack Dorsey Twitter, Inc. - CEO Yeah. Thanks, Doug. As we've talked about on this call before, we do believe that health is a long-term growth vector for us, and we have been doubling our efforts to make sure that we can address all the issues that we're seeing on the service. As I mentioned in my opening remarks, a

3 big focus for us over the past year has been to proactively identify content on Twitter that would violate our rules, so that we don't require a report.

As you know, a lot of our infrastructure in the past was dependent upon reporting of content by the individuals, who were receiving the abuse or harassment and also folks who are bystanders. We have made significant progress on that and saw an 18% drop in reports this past quarter, which is meaningful, and something we want to continue to build around. A lot of this is a focus on building more technology to address the problems. And I have a lot of confidence that we have a lot of great work ahead of us that will continue to leverage to help that situation.

I do believe that health is going to be an ongoing initiative for us. I do believe it's going to be our number one priority for quite some time. There will always be changing dynamics that we need to address, but we are getting better and better at recognizing them faster and more than anything else being able to act on them faster. I think this also speaks to a broader shift in the organization. We've spent a lot of time looking at agility within our developer organization. We're moving much, much faster on health initiative. But that's also allowing us to move much faster within consumer and within our revenue products as well.

So we are finding a good development engine and we are better aligning all the teams to make sure that we focus not only on the clear and present initiatives, but our – we're able to move much faster with much more agility going forward in everything that we take out. So our focus, our execution and how we see results and learn from those results have been really, really excellent over the past two years, and I only expect that to continue and to quicken.

Doug Anmuth - JP Morgan Chase & Co Great. Thank you, Jack.

Jack Dorsey Twitter, Inc. - CEO Thank you.

Colin Sebastian - Robert W. Baird Great. Thanks. A couple for me as well. I guess, first-off, if you could talk about the expansion of the sales team. What you're seeing in terms of improved in some productivity. And then more broadly on the headcount increases, which areas of product developments will gain the most from that? Thank you.

Ned D. Segal Twitter, Inc. - CFO Hey, Colin. As we've talked about over the last couple of quarters, we continue to invest to drive growth across the company's greatest priorities. Health first conversation is a way to continue to grow the audience, our revenue product and sales and platform. And so the headcount growth is really thinking about all of those areas. We continue to add people to the team that works with our advertising partners in different parts of the world thinking not just about where they can have near-term productivity impact, but where we see long-term potential as we continue to drive DAU

4 growth and density in some of the important markets outside of the United States. So, no changes to our thinking in how we grow the team across those priority areas.

Colin Sebastian - Robert W. Baird Thank you.

Eric Sheridan - UBS Thanks so much for taking the question. Jack maybe two bigger picture questions for you. The 2020 Election US seems like a pretty big opportunity given the nexus that Twitter has become around political discourse. Maybe talk through a little bit of the opportunities, but also some of the challenges and how you have to prepare the platform for such a big opportunity in 2020?

And then the NBC announcement around the Olympics seemed like a pretty big positive to us in terms of a video content and tapping into Twitter from real-time. How do you see that product announcement and that partnership as a potential harbinger for additional ways in which you can tap into the live and real-time conversation nature of Twitter with other partners over the long- term? Thanks so much.

Jack Dorsey Twitter, Inc. - CEO Yes, thanks for the question Eric. So, we do see a lot of opportunity, but also challenges with elections. And one thing to keep in mind as Twitter is a global services, we have seen elections all over the world in the past two years and have learned a lot from them. Just in this past year, we saw elections in the European Union, Australia, India, and Indonesia. Our number one priority within elections and conversations on the elections -- conversations around the elections is making sure we're protecting the integrity of the conversation around the election.

This manifests in a few ways. First and foremost, its identifying forms of manipulation used to amplify misleading information. It's increasing transparency around ad purchases and targeting. And it -- of course, it -- we continue to challenge suspicious logins and account creation. It's also really important that in every country that we're in, we have significant local partnership with local authorities, journalists on the ground to make sure that we're seeing things much faster. This is all in a category of misinformation and misleading information and this is our number one focus as we consider the election.

That said, the opportunities are certainly vast. We do see obviously a lot of conversation around news and politics, around the democratic debates and we believe that Twitter has an important role to carry these conversations and to help people learn about what's unfolding within other countries. So, we want to make sure that we are present and that we're organizing the conversation in a way that people can learn from immediately.

In terms of the Olympics and live, as we've talked about on these calls for some time, we think video is an amazing trend, but an amazing complement to conversation. And our work with video and with these live events is to make sure that we can enrich the conversation, to make sure that more people can reach and participate within these events, more people can opine on what

5 they're seeing, and also see the roar of the crowd, but also a recap of everything that happened that they may have missed in the time. So, we're really excited about these events from sports, to news, to entertainment, and it has been something that we feel has made the conversation on Twitter and around the world much, much stronger and much more interesting.

Eric Sheridan - UBS Great. Thank you.

Jack Dorsey Twitter, Inc. - CEO Thank you.

John Blackledge - Cowen Great. Thanks. A couple of questions on DAUs. So the insight of the second quarter, the growth was better-than-expected, if you can just discuss some of the key drivers of the growth? And then any color on key markets driving international market DAU strength in the quarter? And then Jack, you mentioned improved agility. What's driven the product improvement cadence and agility recently versus the past couple of years? Thank you.

Ned D. Segal Twitter, Inc. - CFO Thanks John. I'll start and turn it over to Jack. So, on the DAU growth, we were pleased with the breadth of our performance. As you may have noticed, the US DAU returned to double-digit growth at 10% to 29 million and international grew 15%. When you unpack the international, although we didn't break it out by geography, we did see broad-based DAU growth that we feel good about and that leads us to -- want to continue to focus on the opportunities that we see outside of the United States as well.

When you step back from the DAU growth and you think about what's driving it, Jack went through some of the specific product things that we have done in his opening comments. But it's important to consider that when we talk about relevance quarter after quarter, it's an important reminder that relevance isn't something that you cross off the list and you move on to other things. It's something that you can continue to iterate on and improve around. And that the improvements that we make to the service one quarter benefit, people who come to the service many quarters later. And so, we look at this 14% year-over-year growth we delivered and we see the cumulative benefit of the last few years of work that we've done to improve the service to drive relevance to make Twitter more conversational, to make it easier to find the topic and events that people care about most. Let me turn it to Jack to talk about the agility question.

Jack Dorsey Twitter, Inc. - CEO John, I guess there's three big things here. One is just focus. The second is around our technology. And the third is around our people. So, in terms of focus, we've been -- we know what we are now and we know what sets us apart from our peers and our competitors. We know why people use the service. Why they get value out of it. And that's allowed us to really prioritize what matters most and shut down things that don't contribute to that purpose and contribute to that

6 focus. And that's been quite clarifying and has allowed us to really organize our teams in a much stronger way, so that we can move much faster.

Number two is we've just been applying a lot more machine learning and deep learning to nearly every aspect of the service every problem. We've gotten a lot better at refactoring some of our older platform and infrastructure. We've gotten better at hiring and acquiring teams that are focused on bringing a much higher bar of machine learning and deep learning discipline to every problem domain that we face. And we approach every problem now with technology first and that has been a pretty market shift within the company. We were fairly mechanical three, four years ago in most of the things that we did. So we're seeing that within the experience. We're seeing that within health. And we're seeing that within our infrastructure as well from the consumer side all the way to the revenue product side. And then the third is around people we have the benefit of having some really amazing people with a lot of heart, a lot of care and a lot of strength and resilience. We are focus on doing the right things, but we continue to hire folks who inspire others to join the company as well. We just made a major hire within our design team Dantley Davis, who is leading our design efforts, which will give us a lot more clarity on the experiences that we're creating, how it feels but also providing that amazing design level of thinking to everything that we do not just the product, but around the company. So these three things together have allowed us to move much, much faster in a more focused way that will result in a greater impact and certainly a whole lot more agility. But we benefit across the board from it.

John Blackledge - Cowen Thank you.

Mark Mahaney - RBC Thanks. That DAU growth is really impressive. Could you talk about the extent to which that's coming from people who would use Twitter in the past had an unsatisfactory experience, but they've somehow come back either through viral whatever they've heard that the site has improved or whether those are brand-new users to Twitter. And I guess as part of that, could you just comment on your ability. Because the awareness of Twitter is super high there are a lot of people who have used it in the past and have probably retired from the service your ability to as you can make the product more conversational more intuitive to tap into those users just talk about that as a source of new user growth. Thanks a lot.

Ned D. Segal Twitter, Inc. - CFO Hey, Mark thanks for that. So when we look at how the composition of the people who are new to that DAU bucket, we definitely would think about them in two areas is the people who've been on Twitter before, who are coming back more frequently than they may have in the past, and people who are new to the Twitter. As we talked about for some time, when we look at the funnel the people who come to Twitter, we've been remarkably consistent at the top of the funnel in terms of having a lot of people come to the service every day, whether they come because of a link, because they went to the app on the phone, a notification, or they searched for something somewhere else and it brought them to Twitter.

7 And the opportunity for us is to help them find what they're looking for faster to surface the things that are important to them, the topic and events around them that they care about most. And as we do a better and better job of that, we're able to take the folks who have been coming less frequently and help them come more frequently, and help the people who are new to this service find what they're looking for right away. So, we definitely think about both buckets as having been areas where we found some success recently, but also both where there's a real opportunity in front of us as well.

Krista Bessinger Twitter, Inc. - VP, IR Great. Thank you. And we will take the next question from Twitter. It comes from the Twitter account of Jeri McNeill. And he or she asks, the new timeline makes lists easy to view and switch between, but creating and adding to list is still clunky and non-intuitive. Will there be changes to the list creation feature to better leverage the timeline customization soon?

Jack Dorsey Twitter, Inc. - CEO Thank you, Jeri. This actually speaks a little bit to Mark's questions as well. We have a number of primitives within the app like list that we have been looking pretty deeply at and considering. These are very powerful features that a number of people who have been on the service for quite some time or active today or coming back to the service got a lot of value out of. And the interesting thing about list is it's exactly what we're trying to do with topics and interests. People spend a lot of time finding accounts and putting them on a list, following those lists. The simplest thing that we did recently was we made it -- we made those lists accessible right from the timeline. So if you do create your own lists of topics around say cryptocurrency, you did all the work to find all the interesting accounts within the cryptocurrency space and you've created that list it's -- in the past it's been really hard to find that.

Now it's right at the top of the timeline you can switch between the Home timeline. You can go right to that list. You can also go to any list that you subscribe to. The next step of that as you allude to is making list creation much easier, making it much more accessible to more people and giving more control over that.

We're doing all this work in the spirit of interest in topics and events and we think this will be extremely impactful and it's adding a new set of functionality around not just being able to follow accounts, but generally more topics, more interest. We think this is certainly interesting and relevant within the experience. But we also think there's a huge opportunity within onboarding as well. A lot of you have probably had an experience where the easiest and best way to get someone on to Twitter is to show them who you're following and help them find those accounts as well.

With lists and with these recent moves that we've made, this makes it much, much easier to give people kind of a starter pack around any topic or interest that they might have, that they can easily follow and get a timeline in a very rich experience, almost instantaneously. So this is something that we're really considering. I'm really excited about what we can do with lists and topics and events and I think it'll have a massive net positive impact on the service.

8

Lloyd Walmsley - Deutsche Bank Thanks. Two if I can. First, just you talked about in the shareholder letter some ad unit changes. Can you give us a sense of what's getting deprecated and what some of the new ad units are and how early feedback is? And then second one which may be related, can you just give us an update on progress with the new MAP ads? And what operationally do you need to do to get these in place? And any reason to think that they can't scale pretty quickly given it's a performance product once you get it right?

Ned D. Segal Twitter, Inc. - CFO Hey, Lloyd, thanks for the question. So on the deprecations first, then we'll turn to MAP. You're right they are related. We often are looking at the portfolio of things that people work on here and thinking about how we can drive focus. If we just step back from all the work that we've done and some of the success that we've been able to drive, we really feel like focus has been the -- behind a lot of that.

When we're clear about our priorities and when we focus on those, even at the expense of other things, we see real benefit from that. The product deprecations we mentioned are in service of that prioritization in particular on the revenue product team. When we have ad formats that are big enough that they can impact our ability to guide in one direction or another, but small enough that we don't think that they can have the same long-term benefit as focus on our greatest priorities can, we'll make the tough near-term decision to communicate to the advertisers who use them and to shut them down and hopefully move people over to other things. When you do that, there can be some disruption in the near-term.

An example of that is the carousel product. That one we've announced already. These are -- again they're not big enough that it makes sense to break them out but they do impact the guidance that we've provided a little bit relative to what we delivered in the first and second quarters.

There are a couple of others as well that we've considered or make decisions around, but we're still in the process of communicating. This is all in service of those two big priorities that we've talked about for the revenue product team. The first one is the work we're doing on our ad server to make sure that it is positioned to allow us to move quickly, to try new things, to attract great people in a company who want to work on the latest technology, and who are positioned to move quickly once they get here.

The second one is MAP which is the mobile application promotion ad format that has been a really successful format for us in the past but one where we know we can deliver better where we believe that we can deliver better relevance, we can help advertisers declare their objectives better, we can help them move faster, and deliver stronger ROI for them.

We're still in the middle of that work and as we move forward with it, there may be a point where you can see the benefit from it ramp quickly as you described because it's a direct response-

9 related product. But we're still at the stage where we believe that you would see its impact be gradual in nature. And so we'll talk more about it when we get there and the gradual nature starts, but we're not there yet. We're still working hard to make it happen.

Lloyd Walmsley - Deutsche Bank Great. Thank you.

Brian Nowk - Morgan Stanley Thanks for taking my question. I wanted to ask about -- you mentioned in the letter you're experimenting with new ways for people to better customize their Home timeline, sort of, follow interest a little better. Maybe talk about little more tangible examples of kind of what you're changing. And what are you seeing in the early tests from an engagement or retention perspective? Thanks.

Jack Dorsey Twitter, Inc. - CEO Yes. So, I'll speak to the first part of your question Brian. We started this work some time ago about three years ago is when we first started ranking the timeline by relevance. So, we moved away from a pure reverse chronological model. Over the past year, we introduced some controls at the top of the timeline to enable people to quickly shift from reverse chronological to a ranked timeline and this was very well received by our customers.

It led us to believe that we could do even more. The most recent is around putting lists right at the top of the timeline. So, now people have an experience where if they've subscribed to a list or created a list, they can quickly switch between the Home timeline and also their list. We want to add a lot more controls to this in particular. And we want to make sure that we are giving people control within these timelines around relevance.

As we've talked about for some time in the past potentially even following topics, following interests, following locations everything that really corresponds to getting people to a much more relevant timeline per topic, per event or per enduring interest much, much faster we believe this will create an experience where people can easily follow communities that they are interested in and go very deep and really focus the conversation focus their timeline on that. So, we -- the most important thing for us is this agility aspect that we can quickly experiment and that we can quickly learn and we can co-create with the customers that we serve, so that we can see what's working, what's not working, what they love, what they don't and make some informed decisions based on that.

So that machinery within the company and that practice has really, really improved over the past year. And as we've talked about, the timeline is where people spend the majority of their time. Our focus there -- our focused on making the experience much more relevant, enabling people to additionally make it more topic and event focused and interest focused is something that has been very, very well-received and we're excited to continue. And we're -- especially excited about everything that this year will bring along that dimension. Ned?

10 Ned D. Segal Twitter, Inc. - CFO Hey Brian, just to go to the second part of your question around results. Remember, DAU is just going to be the best way to tell if we are delivering impact for people because if we're giving them a good experience and we're doing all the things that Jack described, they're going to come back to Twitter every day and they're going to come to find out about the topics and events they care about most and they're going to engage with the service and be part of the conversation. So that's why we will keep talking about DAU on these calls for your benefit.

It's worth pointing out though just as we think about the DAU growth, one of the things that we're particularly proud of this quarter is we feel like we can point to causal benefit from some of the product work that Jack described that's already in the service. When we look at the tests we've run, when we look at the impact that the improvements that we've had, we can see a direct relationship between those improvements and the DAU growth that we delivered this quarter.

Brian Nowak - Morgan Stanley Great. Thanks.

Justin Post - BofA Merrill Lynch Great. I apologize if you already commented on this, but just wondering if you're seeing lower churn or if you're really attracting more users to the top of the funnel. I don't think you've disclosed MAUs. But what's really improving on that -- those metrics that help the growth this quarter? And then, also would love to hear about direct response. We talk to advertisers all the time. But it doesn't feel like a lot of them really are engaging yet in Twitter. And just how can that really happen over the next couple of years? And is that a big priority for the company? Thank you.

Ned D. Segal Twitter, Inc. - CFO Thanks Justin. We did cover some of this earlier, but I'll go through it again. When we look at the top of funnel, we feel really good about the consistency and what we see in terms of people who are coming to the service every day because they want to find out what's happening in the world and what people are talking about. Where the opportunity is for us is to help those people find what they're looking for faster, so that they have confidence that the next time they come to Twitter, they'll find what they're looking for as well. And so that means that there still is success in these numbers that we're delivering both from converting people who come less frequently and people who have never been to Twitter before into daily active usage for Twitter.

And as we look ahead, we still see opportunity in both regards as well. When we think about direct response, it's really going to start with the work that we're doing for the mobile application promotion product. I've mentioned earlier that in the interest of focus, we continue to find ways to move people from the other things and there may be even near-term impact when we do that such as the product deprications that we talked about earlier. But as we get mobile application promotions to deliver better for advertisers that should give us a better path to more direct response advertising over time. We want to help advertisers launch new products and services.

11 We want to help them connect with what's happening. And as we move further down the funnel with our ad formats we think there's a lot more opportunity for us to help and deliver.

Justin Post - BofA Merrill Lynch Thank you.

Mark May - Citi Thank you. In terms of the live video product, just wondering, if you could share with us some of the early metrics there in terms of engagement? Or are there metrics that might point to you the kind of traction that you're seeing? And just kind of curious what the vision is here longer term. Are you looking to expand to a point where influencers and other large brands can regularly host live sessions with kind of an infinite number of participants? Just curious a little bit of a deeper dive there. And then secondly in terms of international revenue, do you see any drivers that could result in improved growth there in the international side of the business? Thanks.

Ned D. Segal Twitter, Inc. - CFO So a couple of things, Mark. The first part of your question around live video, so when we think of live video it can be a couple of different things. It could be somebody using the service using live video as a way to participate in or start a conversation. You'd mentioned a part of the live video feature that we've recently rolled out which allows up to three more people to drop into a conversation and be part of a live video. But live video can mean so many other things for Twitter as well. It can mean near real-time highlights whether it's around the Olympics, or seeing every goal from the Women's World Cup, or watching the Democratic debates last month on the service. So there's so much opportunity for us to continue to help improve the conversation on this service through live video.

When we think about numbers we don't tend to think about the benefit of a particular type of format in terms of how it drives people to the service. We instead think about how we can continue to improve the conversation through relevance, through format, through just making it easier and easier for people to be a part of the conversation as the best way that we can drive people to the service and grow daily active usage.

You'd asked about – and by the way, I should just mention one more thing around live video. Jack was talking about the Olympics earlier. One of the cool things about the Olympics, about the Twitter Hitter for Major League Baseball, about the ISO-CAM from the NBA, these are Twitter- specific opportunities where content owners, where leagues are seeing how they can leverage Twitter differently than they can another service, because it's conversational, because it's real- time to allow them to connect with the people who are passionate about their topic or event to drive engagement for them, and obviously to bring people to Twitter as well.

When we look at international, it's a lot of the same work that we're doing in the United States, a lot of the product work that Jack talked about that we feel has driven real benefit outside of the United States, as well and has allowed us to grow DAU 15% internationally in this past quarter.

12 We still see lots of opportunity in countries outside of the United States. Remember 80% of the people, who use Twitter are outside of the US And so that will continue to be a big focus area for us. It's not different things that we're doing in those countries. It's the same work that ought to benefit people all over the world.

Mark May - Citi Thanks, Ned.

Heath Terry - Goldman Sachs Group Inc. Great. Thanks. Jack, you've been talking for a few months now about the idea of being able to follow events and topics and interest. Kind of curious, as you get further down the development path for that, how do you see it rolling out? Will it be a feature that's sort of debuted? Or does it just sort of gradually work its way into people's timelines? And to the extent that you're having the success that you are with little t as an app that's available out there, any sense of what might cause you to want to make that version of the app more widely available to users?

And then just, Ned, one, I guess, hopefully quick one. As we look at the 300 basis points of acceleration in the advertising line this quarter, is there anything in particular particularly in the US business that you would call out as being behind that, whether it's improvements in the ad tech stack, growth in your advertising base, anything that in particular we should be focused on?

Jack Dorsey Twitter, Inc. - CEO Thank you, Heath. So we have over the past year been introducing more topic-like and interest- like things within the timeline. So some of this manifests in terms of topics and interests that you might see around particular events. We're putting more of our events and discovery right at the top of the timeline. We're also noticing when people are sharing particularly URLs and sharing opinions around them that might not necessarily be within your follow graph. So we do believe that the timeline is a good source for us to experiment and see if people are finding value within some of these follows with events and interest.

The biggest shift recently has been putting lists at the top of the timeline. This provides us a way for us to experiment much faster and do some bigger things as well, because we can utilize the list concept as a way to contain a bunch of controls within it. And we have a very – a really exciting roadmap within this. And this is one of my favorite product reviews of the week is seeing what the team is thinking about and experimenting with and how we're thinking about rolling this out. But we should see these continue to roll out.

We want to continue to build a lot of agility into our process, and that means that we're improving the app so we can introduce features like this much faster to more people and we can learn from very quickly. This sits on little t as well. This is a prototype app with a very small beta audience. This is a amazing testing ground that we can shift rapidly. And we have the full app to play with instead of just a section within the production app that allows us to test much broader and much deeper changes.

13 We will always look to expand the number of people who can participate with this. But the ultimate goal is to learn much quicker so that we can get the features that we're testing into production faster. And a lot of what we're playing with within conversation, we think we have a pretty good experience. We think it organizes conversations and replies in a much clearer way. And we do believe that elements of it are ready for production.

It's just a matter of doing that work and making sure we're taking the best parts in all of our learnings and improving it. But the increased agility we've built into the production service in the app and the pairing of that with little t allows us to most importantly learn much faster as we get feedback from the people that we're serving and also pairing that with some opinions we have on where the service should go.

Ned D. Segal Twitter, Inc. - CFO Hey, Heath, the second part of your question around the ad revenue and the performance this quarter. One of the highlights there that you probably noticed was the 29% ad revenue growth in the United States. When we look at that and the strong performance outside of the United States as well, we feel like our messages of launching new products and services and connecting what's happening continue to really resonate with advertisers.

Bruce and the Revenue Product team are designing great ad formats and delivering. And Matt and the customers' team are doing an awesome job connecting with our advertisers and helping them get a strong ROI on the service all over the world. And we continue to see real benefit from those conversations. You see it manifests itself in improving click-through rates. You see it manifests itself in ad engagement scoring 20% against a growing audience. So, we feel really good about that.

It's worth pointing out when you look at the revenue and you unpack it, you may notice that the data and other line which includes our data and enterprise solutions business as well as MoPub that declined more than it – one might – or it grew less than one might have expected this quarter.

We consider that 4% growth more of an anomaly. When we look at new business won and the timing of that last year relative to the timing of it this year around the data and enterprise solutions business, that probably had more impact on that number on a quarterly, year-over-year basis than it would if you looked at things over the course of the full year.

We talked in the last few quarters about how we feel so good about how we've executed on our strategy in DES over the last few years. But as a result of that, that business is likely to grow at lower rates in the future than it has in the past. We really meant on a full-year basis, and so I'd look at that 4% as more of an anomaly. Thanks for the question Heath.

Ross Sandler - Barclays Hey guys. Thanks for squeezing me in. One for Jack and maybe one quick one for Ned. Jack, so on the list topic here, how big is list as a percent of total Twitter consumption today? And as a heavy list user myself, I've never seen an ad in list. So, is that an opportunity at some point? How do you think about the ads opportunity in list and potentially in TweetDeck?

14 And then Ned, Japan decelerated a little bit. So was that – I know they had a huge comp from a year ago. Is any of the licensing decel that you just mentioned flowing through Japan? Or is that ads? Can you just flush out a little bit on what's going on in Japan? Thank you.

Jack Dorsey Twitter, Inc. - CEO So, Ross we're not breaking out the consumption percent on list, but we – for the people who really understand Twitter and a lot of our customers who have done the work, lists are instrumental in their experience. They organize their experience around these sub lists that complement their timeline very well.

So what we're trying to do here as we've seen with nearly every major feature and functionality and aspect of the service is recognize when these customers who figure out the power of Twitter and just making that more accessible to everyone, at the same time, increasing the amount of control over these primitives like list.

So, we think there's a number of things that we can do within the list construct that gives people a whole lot more control and answer some questions for us around what it means to truly follow a topic or an interest and to provide a very easy experience to switch between your Home timeline as well. We want to think as lists more broadly as timeline, as stream -- streams of Tweets. But in the list case, it's more organized around these events and topics. And as we have in the past, we start with an experience. And as we learn from it, we'll figure out, if there's revenue products that better the experience as well.

Ned D. Segal Twitter, Inc. - CFO So Ross, just a couple of things to tie that off and move on to Japan. When we look across the service areas on Twitter, when we look across geographies in times of year, we continue to feel more demand constraint and supply constraint and still see opportunity to help advertisers realize their objectives and drive better relevance and show great ads to people on the service. So I'll just refer back to Jack's comments on list.

On Japan, a couple of things to point out to you. One, if you step back and think about what we've accomplished over the last couple of years in Japan, revenue in Japan in Q2 of 2017 was a little more than $70 million. It's a little more than $130 million in Q2 of 2019. But 65% year-over-year growth in Q2 of 2018 when we had major breakthroughs with a concentrated agency market when our ad formats began to really resonate with advertisers in Japan was followed by 9% this quarter. 9% as you can imagine is a little impacted by currency. It's impacted by the tough comps.

And then, if you look at any given country, the growth rates in any given quarter are impacted by the ad formats that people are embracing, the campaigns that people are running, the topics and events that are bringing people to Twitter. And so that stuff impacted Japan more than we might have liked in the second quarter. When we look ahead and we think about the work that we're doing on MAP, when we think about the Olympics being hosted in Japan next year and we think about all the hard work that we've done there to get closer to the agencies and to the most important advertisers, we feel really good about the potential in Japan over time, and so we'll work

15 hard both from the data licensing, another line that you mentioned but even more importantly from the broader ads opportunity.

I think with that, we're going to wrap up. Thanks for joining us everyone. We're pleased with our performance this quarter. We appreciate your interest in Twitter. And we look forward to speaking with you next quarter, when we report earnings on October 24 before the market open. We better wrap because it sounds like they're taking out the garbage outside our building here in San Francisco if you heard any of the noise behind us. We will see you all on Twitter.

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