Twitter IPO Filing: What You Need To Know

The company made its filings with the SEC public on Thursday evening. Here are the highlights.

Twitter--or TWTR, as it will be known on the stock market--is looking to raise $1 billion in an upcoming IPO. Because it filed under a law that makes it easier for companies with less than $1 billion in revenue to go public, its filings were confidential until Thursday evening. Here's what we learned when they went public:

1. Twitter Isn't profitable, but it's growing its revenue quickly.

Twitter brought in $316.9 million in revenue last year, an 198% increase from the year before. Most of that revenue, $269.4 million, came from its advertising business, but about $48 million came from its data services products.

Though the company is still not profitable, it's narrowing the gap. From 2011 to 2012, net loss decreased by 38% to $79.4 million.

Still, an accumulated deficit of $418.6 million isn't going to go away overnight. "We expect that our revenue growth rate will slow in the future as a result of a variety of factors, including the gradual slow down in the growth rate of our user base," Twitter acknowledged in its filing. "You should not rely on the revenue growth of any prior quarterly or annual period as an indication of our future performance. We also expect our costs to increase in future periods."

2. Twitter doesn't have a mobile problem.

Facebook faced skepticism that it could grow its mobile advertising business when it filed for its IPO last year. At the time, it was making no revenue from the mobile devices its users were transitioning to. Twitter doesn't have this problem. About 75% of its average monthly active users accessed Twitter from a mobile device, and the company already earns 65% of its advertising revenue from that activity.

3. Twitter knows its a small fish in a big pond.

The company has significantly fewer users and monetary resources than its closest competitors. And though it does have some unique aspects that make it comparitively appealing for specific types of advertising, it realizes this is a risk. From the filing:

"We compete against many companies to attract and engage users, including companies which have greater financial resources and substantially larger user bases, such as Facebook (including Instagram), Google, LinkedIn, Microsoft and Yahoo!, which offer a variety of Internet and mobile device-based products, services and content. For example, Facebook operates a social networking site with significantly more users than Twitter and has been introducing features similar to those of Twitter. In addition, Google may use its strong position in one or more markets to gain a competitive advantage over us in areas in which we operate, including by integrating competing features into products or services they control. As a result, our competitors may acquire and engage users at the expense of the growth or engagement of our user base, which would negatively affect our business."

4. Twitter is only as good as its content, and that's a risky position to be in.

Twitter lists as a risk in its filing,"the amount, quality and timeliness of content generated by our users," and notes that its efforts to fight spam divert time and focus away from the product. "If spam increases on Twitter," the filing states, "this could hurt our reputation for delivering relevant content or reduce user growth and user engagement and result in continuing operational cost to us."

5. Twitter hired about 1,800 people in the last three years.

That's a flock of about 2,000. Facebook, by comparison, had 5,299 employees as of June.

[Image: Flickr user Christian]

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