Q3 2021 Twitter Inc Earnings Call

October 26, 2021

Good day, ladies and gentlemen, and welcome to the Twitter third quarter 2021 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, VP Investor Relations. Please go ahead.

I would now like to turn the call over to your host Mr. Passenger VP Investor Relations. Please go ahead.

Hi, everyone and thanks for joining our Q3 earnings conference call. We have Jack and Ned with us today. We published our shareholder letter on our Investor Relations website, and with the SEC a couple of hours ago, and hope that you've all had a chance to read it.

We published our shareholder letter on our Investor Relations website, and with the SEC a couple of hours ago, and hope that you've all had a chance to read it.

As usual, we'll keep our opening remarks brief so that we can get right to your questions. As a reminder, we will also take questions asked on Twitter. So please tweet us at Twitter IR using the cash tag TWTR.

As a reminder, we will also take questions asked on Twitter. So please tweet us at Twitter IR using the cash tag Tw TR.

During this call, we will make forward-looking statements, including statements about our business outlook strategies and long term goals. These comments are based on our plans predictions and expectations as of today, which may change over time.

These comments are based on our plans predictions and expectations as of today, which may change over time.

Our actual results could differ materially due to a number of risks and uncertainties, including the risk factors in our most recent 10-K and 10-Q and upcoming 10-Q to be filed with the SEC.

Also during this call, we will discuss certain non-GAAP financial measures. We've 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.

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.

And with that I'd like to turn it over to Jack. Hello, everyone. Thank you for joining us today.

Hello, everyone. Thank you for joining us today.

A few highlights for me before we get to your questions. We had a solid Q3 with strong performance across revenue products and continued audience growth.

We had a solid Q3 with strong performance across revenue products and continued audience growth.

Revenue was $1.28 billion in Q3, and we continue to see significant AD revenue growth, which increased 41% year over year this quarter. Average monetize it will be a new increase to $211 million up 13% year over year with growth accelerating from an increase of 11% year over year in Q2.

Average monetize it will be a new increase to $211 million up 13% year over year with growth accelerating from an increase of 11% year over year in Q2.

Before we get deep into the quarter and how we're looking at the rest of the year.

As you may have seen we announced that we agreed to sell MoPub to AppLovin.

First, I want to thank the team for all their hard work and contributions to Twitter. And our customers who put trust in us and the MoPub team for many years.

And our customers, who put trust in us and the more protein for many years.

The sale demonstrates our confidence in our core revenue product strategy, allowing us to refocus our energy and resources on our direct response, SMB and Commerce Roadmaps.

The last time, we talked you heard us talk about our intention to build an ecosystem of connected features and services focused on serving three core jobs. This discussion and helping people get paid.

This discussion and helping people get paid.

In Q3, we launched products across all these categories, including ticketed spaces pips, super followers and narrowcasting with communities. We also have the ability to pay your favorite creators using a variety of payment methods, including for the first time Bitcoin.

We also have the ability to pay your favorite creators using a variety of payment methods, including for the first time pick one.

We continue to upgrade our machine learning systems, as well, which are improving personalization throughout the product. We're just getting started but already Twitter feels more responsive and intuitive.

We're just getting started but already Twitter feels more responsive and intuitive.

That's more to come here. As we approach the end of the year, we feel confident about where we're headed. Overall, we're on course to late 2021, a more focused company with clear priorities. I'll pass it over to Matt.

As we approach the end of the year, we feel confident about where we're headed.

Overall, we're on course to late 2021, a more focused company with clear priorities.

I'll pass it over to Matt.

Thanks, Jack. Q3 was a solid quarter driven by focus and execution, total revenue grew 37% year over year at the high end of our guidance. mDAU grew 13% year over year to $211 million. With US mDAU, essentially flat quarter over quarter and up 4% year over year, both in line with our expectations due to the unusual comps from the pandemic surge last year, coupled with typical seasonality.

<unk> grew 13% year over year to $211 million with U S. MCA, you essentially flat quarter over quarter and up 4% year over year, both in line with our expectations due to the unusual comps from the pandemic surge last year, coupled with typical seasonality.

We expect total mDAU in Q4 to grow at or above the Q3 rate of 13% on a year over year basis. And we continue to believe the low point for year over year mDAU growth in 2021 was back in Q2 due to those tough comps.

And we continue to believe the low point for year over year <unk> growth in 2021 was back in Q2 due to those tough comps.

The impact of COVID remains fragmented across the world and we believe consumer behavior has yet to normalize. Despite these uncertainties, we remain optimistic given our healthy top of funnel, our conversion rate and our product road map, which allow us to serve more and more people every day.

Despite these uncertainties, we remain optimistic given our healthy top of funnel, our conversion rate and our product road map, which allow us to serve more and more people every day.

Sure some of the highlights from the Olympics on our DR Road back from Q3. The Olympics were a strong event for us. Olympics related tweets with video content reviewed more than 1 billion times on Twitter.

The Olympics were a strong event for US Olympics related tweets with video content reviewed more than 1 billion times on Twitter.

There were 76 billion tweet impressions related to the Olympics and 12 of the 14 official Olympic sponsors advertise on Twitter. Our shift to direct response ads also made great strides for map advertisers, we launched an updated learning period model that delivers more consistent campaign performance.

Our shift to direct response ads also made great strides for map advertisers, we launched an updated learning period model that delivers more consistent campaign performance.

And for website clicks, we introduced a multi destination carousel to enable advertisers to market and drive traffic to multiple products inside the same AD on Twitter.

These are just a few examples of our accelerated pace of testing and rolling out new features that we won't stop there when it comes to increasing focus on our most critical work. As Jack mentioned earlier, although it happens in October it's worth spending a moment on the announced sale of MoPub.

As Jack mentioned earlier, although it happens in October it's worth spending a moment on the announced sale of <unk> pumps.

The sale of MoPub positions us to reallocate resources and accelerate product development by investing more in the teams focused on better monetizing our website and apps.

The sale is expected to close in Q1, and while the associated price, engineering and go to market teams are largely expected to shift to DR SMB and commerce upon closing it will take time for their work to deliver results. We do not expect to recoup the full revenue loss associated with the sale of MoPub in 2022, which is estimated to be between 202 hundred $50 million.

Estimated to be between 202 hundred $50 million.

Some expected 2022 revenue loss there are no changes to our goal of generating 7 and a half billion or more of annual revenue in 2023, with our increased focus and additional resources working on increasing our market share in the $150 billion and growing addressable market for ads on Twitter.

I've also noticed there's been a lot of focus more broadly on the impact of the supply chain on the economy in general and advertising in particular.

I'm pleased to share that our launching connect value proposition continues to resonate with advertisers across the economy, plus well more than half of our total AD revenue year to date associated with services and digital goods.

But let me also spend a moment on ATT, we continue to see opportunities around personalization on Twitter as we better leverage our unique signal to improve people's experience and show them more effective ads across both brand and direct response for.

The revenue impact we experienced from AT&T in Q3 increased on a sequential basis, but remains modest. The impact of AT&T is likely to vary across AD platforms, given the unique mix of AD formats, signal and remediation on each as well as other factors.

Pact of AT&T is likely to vary across AD platforms, given the unique mix of AD formats signal and remediation on each as well as other factors.

The mitigations we put in place and the speed with which we've adopted new standards like the SCA network, and resulting changes across our technical staff have contributed to minimizing the impact to us.

Since launch of ATT in April, we've invested in supporting the SCAD network opening up 30% plus more inventory and scale on iOS and launch support for viewed through attribution and SK campaign management features and a Twitter ads manager.

Still too early for Twitter to assess the long term impact of apples privacy related iOS changes. But the Q3 revenue impact was lower than expected and we've incorporated an ongoing modest impact into our Q4 guidance.

But the Q3 revenue impact was lower than expected and we've incorporated an ongoing modest impact into our Q4 guidance.

We've seen our revenue product development, both related to and distinct from AT&T improved the performance of our products and we expect that to continue.

Let me quickly turn to a couple of points regarding our outlook. We continue to expect total revenue to grow faster than expenses in 2021, excluding the litigation settlement announced in Q3. And we expect to continue our investment posture as we enter next year.

We continue to expect total revenue to grow faster than expenses in 2021, excluding the litigation settlement announced in Q3.

And we expect to continue our investment posture as we enter next year.

I will talk more about 2022 in February but let me provide a little more context here. Our 30% plus headcount growth in 2021 with annual Merit increases and other investments we've made in 2021, including our new data center will flow into annual expenses for 2022 likely resulting in a mid 20% increase in total expenses.

Next year prior to hiring any more people or additional investments during 2022. We're pleased with our Q3 results and we're excited about the momentum we bring with us into Q4, let's go to questions.

Pleased with our Q3 results and we're excited about the momentum we bring with us into Q4, let's go to questions.

So attendees, who would like to ask a question simply press Star then the number one on your telephone keypad. Again that is part one. We'll pause for just a moment to compile the Q&A roster. Your first question is from Doug Anmuth JPMorgan. Your line is open.

Again that is part one.

We'll pause for just a moment to compile the Q&A roster.

Your first question is from Doug kind of moved from Jpmorgan. Your line is open.

Thanks for taking the question back to. First for Jack how do you think about the path to returning to 20% growth in 2022, and '23 and which is the new products do you think will be most impactful here? And then secondly, Ned just on the comment you just made about the increase in expenses.

First for Jack how do you think about the path to returning to 20% growth in 2022, and 'twenty three which is the new products do you think will be most impactful here and then secondly, Ned just on the <unk>.

Comment you just made about the increase in expenses so.

Sure we're understanding it right, you're kind of saying expenses ending '21 will take you to mid-20s percent increase flowing that through before you even hire anybody or add additional expenses. So that's a number that you'll update in three months? Thanks.

Thanks.

Yes, just to get the first question. Our greatest opportunity and potential for growth is around personalization and relevance. That is where we've consistently gotten the greatest gains in everything that we do and we intend to put a lot more of this year.

The first question.

Our our greatest opportunity and potential for growth is around personalization and relevance.

That is where we are.

We've consistently gotten the greatest gains.

No, we do and we intend to put a lot more of this year.

Mainly it speaks to our application of machine learning in general. Across every product surplus that we have. But it also lends itself into some of the newer products services and capabilities.

Across every product surplus that we have.

But it also lends itself.

Into some of the newer products services and capabilities.

That we've been talking about some for longer some more recently.

More recently.

Topics and interests continue to be a highlight, we were close to 12000 topics now, 11 different languages, 239 accounts following at least one topic. We're putting us closer and closer to Onboarding.

He needs to be.

A highlight we were close to 12000 topics now 11.

11 different languages $230 million accounts following at least one topic.

We're putting us closer and closer to Onboarding.

But this helps everything. This helps our experience. Consumer experience that helps our business because it gives us signal with a ton of intent. I'm expressing intent around a particular issue or topic instead of us having term for it.

Consumer experience that helps our business because it gives us.

Signal with a ton of them.

I'm expressing intent around a particular issue or topic instead of us having term for it.

It also lays the foundation for the products that we want to create so spaces. Example of this which we just rolled out to 100% of all of our customers communities, which is slow narrowcasting whose case, allowing people to talk specifically. It feels like a much smaller room about the topics interests and the location with my neighborhood.

Example of this.

It's rolled out to 100%.

All of our customers communities, which is slow narrow casting whose case, allowing people to talk.

Talk specifically.

It feels like a much smaller room above the topics interests and the b location with my neighborhood.

I think we will definitely see a lot of usages as people find new ways of having conversations that don't feel like they're tweeting to just the entire world and broadcasting it but actually we have a much tighter feedback loop, because we're talking about something that is locally interesting or move up what particular interest or that should be a location geography. So those are the ones I would point to.

Having conversations that don't feel like they're tweeting to just the entire world and broadcasting it but actually we have.

Much tighter feedback loop, because we're talking about something.

Locally interesting or move up.

What particular interest or that should be a location geography. So those are the ones I would point to.

And this is an area where we feel we are behind although we've put a lot we've gotten a lot of gains from it. That just really speaks to the potential we have so much more work to do in terms of machine learning and just generally applying AI to every surface or whatever.

That just really speaks to the potential we have so much more work to do in terms of.

Machine learning and just generally applying AI to resurface or whatever.

Hey, Doug just to add a little bit to that and get to your question on expenses. So top of funnel continues to be healthy all around the world for us.

The folks having been on Twitter for a month or more whether they've never been on Twitter before they've tried it in the gas, but the product stuff that Jackson <unk> through plus that healthy top of funnel and all the events and topics.

That continue to bring people to Twitter all over the world. Those are the components that build us up to that $315 million number for the end of next year. When we put it out there in February remember, we knew that this was going to be year, where we'd be lapping last years.

Those are the components that build us up to that $315 million.

Number for the end of next year, when we put it out there in February remember, we knew that this was going to be year, where we'd be lapping last years.

Pretty incredible growth. And that acceleration was required and so we've now started that with 11 from Q2 going into 13% DAU growth in Q3, but the second part of your question on expenses. So we'll give more color around 2022 in February as we typically do but we just want to remind everybody of one our investment posture hasn't changed.

Required and so we've now started that with 11 from Q2 going into 13% <unk> growth in Q3, but the second part of your question on expenses. So we'll give more color around 2022 in February as we typically do but we just want to remind everybody of one our investment posture hasnt changed and as.

And as we mentioned back in February as long as we're on track for our goals were to continue with a mindset to invest to drive growth. And when you just do the math on the hiring and investment decisions that we've already put to work.

Whether it's data center or people who have already joined the company that when you roll those through the P&L for a full year you added merit increases and so on, you naturally get to and this includes depreciation for the data center for example, which doesn't start until you actually start to use the data center. And you naturally get to the mid 20s.

We are in the middle of the process, where we sort out all the things that we wanted to do next year. So I don't want to get in front of that but we do want to continue to invest to drive growth next year and anything else that we decided to do that isn't a resource reallocation decision would be on top of that.

Great. Thanks for clarifying.

Your next question is from Justin Post your line is open.

Great. Thank you, you're enabling shopping so maybe talk a little bit about that and how you see the opportunity. And second, you guided to 25% quarter over quarter and comparatively are you expect the map product to kind of contribute better growth than overall in Q4?

Second you guided to 25% quarter over of course.

And comparatively are you expect.

The map product to kind of contribute.

Better growth than overall in Q4.

Hey, just a couple of things. On the revenue product side. First we were pleased with our progress on map a couple of ways to show. One is, map grew slightly faster than overall ads, which gives you a sense.

On the revenue product side.

First we were pleased with our progress on map a couple of ways to show. One is map grew slightly faster than overall ads, which gives you a sense.

Yes.

That we're continuing to make progress there. We saw strength from some areas, where we haven't always seen in the past such as travel where launched campaigns as people begin to travel again from the travel advertisers grew 40%, a lot of that's tied to map. Our FinTech. They grew their spend 200% year over year with us.

Gives you a sense for where some of the strength is coming from.

In a sense for where some of the strength is coming from you.

You mentioned shopping so we now have business profiles to differentiate on Twitter or you could procure hours of operation. We will also make it so stay tuned for that. We have been experimenting the path over the course of this year.

We will also make it so.

So stay tuned for that.

We have been.

Parents and without over the course of this year.

Also on the direct response. By 20% which gives you a good sense for why.

By 20% for <unk>.

Hi.

A good sense for why.

And more and more dollars to our service. So, we'll keep marching down that road map and with the sale of MoPub will have more resource to your second question around revenue guidance. And so if you back out last year.

So, we'll keep marching down that road map and with the sale of <unk> will have more resource to your second question around revenue guidance.

And so if you back out last year.

And you look at the four prior years, you see sequential growth in Q4 for us that was from the mid teens. And so when you 1.5 to $1.6 billion range. You can see that that's the reason.

And so.

When you.

<unk> five to $1 $6 billion range.

You can see that that reason.

It will be consistent with what we've seen in the past. We feel like we're entering Q4 with the wind at our backs with the Olympics haven't got us off to a strong start. In Q3, the Olympics I went a little bit better than we had expected them to. From a revenue perspective, we were really pleased with how we were able to deliver for advertisers and the strength continues.

In Q3, the Olympics I went a little bit better than we had expected them to.

From a revenue perspective, we were really pleased with how we were able to deliver for advertisers and the strength continues.

Throughout the quarter across geographies, across formats across verticals and with a great event calendar with lots of product launches in front of us with that strong mix of services and digital goods that we talked about earlier, we feel like we've got a lot of momentum at our backs right now.

Great. Thank you.

Your next question is from Rich Greenfield from LightShed partners. Your line is open.

Thanks for taking the question. I wanted to think about sort of a follow up on Doug's question at the beginning sort of as you think about sort of the interest wrap and sort of Jack's comments about sort of understanding intent and I guess, not just focusing on polymers that you're starting.

I wanted to think about sort of a follow up on doug's question at the beginning sort of as you think about sort of the interest wrap and sort of Jack's comments about sort of.

Understanding intent and I guess, not just focusing on polymers that you're starting.

How does all of this play into sort of your long term positioning on privacy? The changes and I'm not even just talking about iOS 14, but as you think about what Apple could do in the future Google's looking at Cookie changes like how does all of this translate into like are you using any of it really yet?

Privacy.

The changes and I'm not even just talking about iOS 14, but as you think about what Apple could do in the future Google's looking at Cookie changes like how does all of this translate into like are you using any of it really yet.

To really target ads like where are you in that process? And as you think out over the next few years. How exposed are you to outside changes versus being able to leverage on platform first party data to target advertising effectively? Thanks.

How exposed are you to outside changes versus being able to leverage on platform first party data to target advertising effectively thanks.

Hey, Rich. Relative to the signals we can get from it, it's quite small in terms of what we're using today. All right. Privacy is about also making sure that direct ways of people telling us what they are interested in.

Relative to the signals, we can defer a minute.

Quite small in terms of what we're using today.

All right.

Privacy is about.

Also.

Making sure that.

Direct ways of people.

Telling us what they are interested in <unk> and.

And being able to call it a topic of interest. This is one such way. Community to talk about an interesting topic is another way. These are all things that people are in temporary opting into. Saying that they're interested in this particular thing and it gives us much much stronger signal, but also gives us new surface area to consider what we can do with communities.

This is one such way.

Community to talk about an interesting topic is another way these are all things that.

People are in temporary opting into.

Saying that they're interested in this particular thing and it gives us much much stronger signal, but also gives us new.

Surface area to consider what we can do with communities.

Which hasn't hasn't launched fully in Nvidia we're testing currently.

But it gives us the surface area for advertisers, who maybe they just want to be shown around the particular profit's been sort of more broad-based in the home timeline.

Shown around the particular profit's been sort of more broad based in the home timeline.

So it gives them a much safer spaces, if they want to avoid particular topics or anything that might be political or not. And they have not just the people that we're trying to reach so that helps them really.

And they have.

Not just the people that we're trying to reach so that helps them really.

What we want to drive. And it starts with the product itself. And then making sure that we utilize those signals to deliver a person the most relevant at her introduction to our products and service. But I can imagine and they'll tell us whether that's relevant or not. So whether they tap on it or purchase something.

It starts with the product itself.

And then making sure that we utilize those signals to deliver.

A person individually the most irrelevant at her introduction to our products and service.

But I can imagine and tell us what the flex variable or not.

So whether they tap on it or.

Purchase something.

And all these things give us more information so that we can create a much tighter feedback loop. So that all of these actions can positively reinforce one another so.

So that all of these.

Actions can positively reinforce one another so.

All of these things show a particular intent and a particular interest and reaffirm depend less and less around occurrence. In order to strengthen our relevance and get better signal. And where are you in terms of like you said you're still in the very early days of using this data are not using very much of it. How do we emerge that intent data and user data?

In order to strengthen our relevance.

No.

And where are you in terms of like you said youre still in the very early days of using this data are not using very much of it how do we emerging that intent data and user data.

To drive that like is that a 23 event is it longer like how do we just think about over the next couple of years when we start to really see the benefits from that?

The benefits from that.

Yes.

One of our one of our biggest priorities in the company right now is personalization. So we're going to put a premium on finding all the right signals to make sure that you're not just seeing more relevant ads, but you see more relevant tweets as well. It's a very similar system so.

So we're going to put a premium on finding all the right signals to make sure that.

You're not just seeing more relevant ads to people seem more relevant tweets as well.

It's a very similar systems so.

I don't think it's all that far off and then we can start using more and more of these signals to increase the relevance of what we show. But this is the greatest opportunity for us in terms of relevance and that drives everything from them. So that was all decisions.

But what this is.

The greatest opportunity for us.

Terms of relevance and that drives everything from them.

So that was all decisions.

Thanks very much.

Your next question is from Mark Mahaney from ISI.

Your line is open.

Okay. Thanks, I, just want to ask about unlocking small medium sized business customers.

State that it's a relatively small part of your.

Your Advertiser base now what do you think are the two or three things you need to do to really unlock that advertiser base, how easy is that to do mature, it's not easy but the length of time. It takes to do that what do you think are the major reasons why they're not as engaged with you as they should be thank you.

Yes.

I think there's a number of things here one is.

We do have.

A lot of small businesses on Twitter, but we have not served them well both in terms of the product and also the advertising capabilities.

Dr is a big part of us, making sure that we continue our move towards more and more performance based advertising.

Self serve is a big part, providing a intuitive interface where.

A one person small business support sole proprietorships and actually come onto our system and.

Understands how to reach the customers what they are trying to reach.

And then there's a bunch of products surface areas.

But I think to make us better, the topics, if you're talking about includes locations as well. So you know now with her using my hometown St. Louis, Missouri as a topic I can follow up and again that's the intent.

<unk>.

If you're talking about includes locations as well. So you know now with her using my hometown St. Louis, Missouri as a topic.

Topic, I can follow up and again thats the intent.

You can use as a signal communities is going to be a big part here.

You consider topical community's interest communities and also communities focused firms.

Their locations.

That's going to be an incredible surface there for small businesses. So theres. Some foundational work in terms of the performance all direction that we're moving to.

But also making sure that we are building something that ultimately software for small business.

We can open up the web site.

Get the advertising right away and actually some value in there.

Theory, which means that they have.

Really crisp and intuitive.

And then the more and more capabilities, we have through the product including.

Our aspirations around commerce.

That helps with retaining and attracting new small businesses as well.

We have been launching some things recently, where the business profile.

And there is a lot more to come but all of these things will help form.

Smallest businesses won't be able to utilize us.

Scale up as I know for myself.

Thank you.

Your next question is from Ross Sandler from Barclays. Your line is open.

And then one for Jack.

The U S AD revenue looks really good.

In the third quarter plus 15 in Q2.

Great broken Snapchat are recorded in there.

So that the Olympics or other factors do you think you're potentially picking up a little bit of share from these folks who have a much more significant problems around.

<unk> <unk> thousand 14, and then Jack the shop module just a follow up on that last question that was pretty interesting.

Is this mostly.

E Commerce initiative.

Our self serve process to get smaller businesses, how do you guys happen to some of the larger E. Commerce advertisers are out there that are spending tens of millions of dollars or hundreds of millions of dollars.

Because there are big outbound effort and sell to tap into that.

Just any color there thanks a lot.

Hey, Ross first on the U S ads revenue. So we are really pleased with how we performed in Q3 in the U S. In particular.

A part of it is the Olympics.

We think we're better than we had expected by a little bit and a lot of that shows up in the U S. Certainly not all of it though.

But as events began to come back as people went back to stadiums as they went back to theaters and other places they continue to use Twitter and advertisers continued to use Twitter as a way to reach them, whether it's the 2 billion impressions. We saw during the video music awards or the 76 billion impressions.

As we saw during the Olympics. These are just great examples of that and helping advertisers connect with their customers around a full baseball season in the U S.

Round the lead up to the football season, both pro and college and all the highlights that we've got with every touch that now during the NFL.

A lot of the commentary around those so has it been great opportunities for us in the U S. But there are just some of the examples of what we've seen and when we look at places like Japan, which grew 20% year over year. It's a powerful reminder, that different economies are coming out of COVID-19 at different times and went into <unk>.

Locked down at different points and so although the year over years are going to be wonky.

For one reason or another there is still lots of opportunity for us in other geographies, where we have a sizable audience and great relationships with advertisers Japan is map continues to improve as they gradually come out of Lockdown, we see law.

Lots of opportunity. There just is another great example, where there's a geographic opportunity for us I'll turn to Jack on the second part.

And this is a.

Commerce is an area, where we want to start small and scale.

So we wanted to make sure that we are building a great product that people want to stick with.

Right now the opportunity is around smaller but that doesn't limit us later on from much much larger retailers and.

Brands.

So I think theres a lot of opportunity.

To partner a lot more so the people who already have e-commerce solutions up and running with their inventory and tied into central legacy systems.

Lot of larger retailers have constraints around.

But theres, just one type or one click to turn it on and turn that inventory on to Twitter as well. So we want to make sure that were personal foremost building great products and then we'll look to scale. It and then turn on more of a sales engine.

Great. Thanks.

Thanks, Jack and we're going to take the next question from Twitter. It comes from the account of Olivier Caza. And he asks how does crypto fit into the global strategy at Twitter now? How does chipping and subscription monetize so far? And he also asked about the progress at review so far. So we just turned on the coil tubing, for chicken products before we have a number of third party services that people could use to receive tips. What makes the coin interesting is that it seems globally accessible, it doesn't matter where you are in the world.

Hey, Carter.

And he asks how does crypto fit into the global strategy at Twitter now.

Chipping and subscription monetize so far and he also asked about the progress so far.

Well.

So so we just turned on the coil tubing.

Core chicken products before we have a number.

Third party services that people could use to receive tips.

What makes the quite interesting is that it seems globally accessible it doesn't matter where you are in the world.

Core non interest you received. According to <unk>. So Korea over the Lightning network. You can do it.

According to <unk>.

So Korea over the Lightning network.

You can do it.

So it really opens up the aperture of who can participate instead of having to go market by market.

And look for services that operate with a bank from each one of those, so it gives much more speed. Both tipping subscriptions are new. These are products that we want to make sure that again, we're starting small and we figure out the right products that people want to stick with them and evaluating every single day.

Both tipping subscriptions.

Our new <unk>.

Our products are.

We want to make sure that again, we're we're starting small and we figure out the right products that people want to stick with them and they're.

Evaluating every single day.

And then we'll roll them out to more and more people and sell it. And we continue to iterate on the product. The progress of review, which is our newsletter products as a reminder of why we did this we want to make sure that Twitter is a place where you can express yourself in multiple formats, whether that be through short format updates like tweets, spaces, which is some audio conversation more plan. Or long slump.

And we continue to iterate on the product.

Progress of review, which is our.

Newsletter products as a reminder of why we did this we want to make sure that.

Peter is a place where you can.

Express yourself in multiple formats, whether that be through short format updates like tubes.

Faces, which is some audio conversation more plan.

Or long slump.

Which is a review in the newsletter.

The more we integrate those, the more opportunity and potential that we see.

I think rather than looking at any one part of the equation, though it's useful to consider the ecosystem. Someone being able to tweet out, but they're going to post the space. Or add emission credits for that space, which is what we call ticketed spaces. And host the space potentially be able to sell our products. Through commerce initiatives and then after those spaces complete rather newsletter to all their followers around town Atlanta, Tampa and some insights.

Consider the ecosystem.

Being able to tweet out, but they're going to.

Most of the space.

Add emission credits for that space, which is what we call ticketed spaces.

And host the space potentially be able to sell our products.

Commerce initiatives and then after those spaces complete rather newsletter to all their followers around town Atlanta, Tampa and some insights.

All these things positively reinforce one another and allows people to reach in entirely new ways, some people might not be able to see space, but they can get the newsletter person back to retreat from and so forth. So we're focused on the ecosystem model the connection between the parts as being the strength not the individual aspects of it. And making them the strongest but actually, the connection between is where we think the greatest Verizon is going to come from.

In entirely new ways, some people might not be able to see the soonest.

Space, but they can get the newsletter person back to retreat from and so forth. So we're focused on the ecosystem model the connection between the parts as being the strength not the individual aspects of it.

Making them the strongest but actually the connection between is where we think the greatest Verizon is going to come from.

Thank you operator, we'll take the next question please.

Your next question is from Eric Sheridan from Goldman Sachs. Your line is open. Thanks so much for taking the question. I want to come back to a couple of topics. We've talked about before, is there any way to size sort of the brand advertising upside you saw and separate that out between the US business and rest of the world in terms of where some of that brand advertising strength was derived from? And maybe the same element with respect to direct response should we think about what you've built so far to date?

Thanks.

So much for taking the question I want to come back to a couple of topics. We've talked about before is there any way to size sort of the brand advertising upside you saw and separate that out between the U S business and rest of the world in terms of where some of that brand advertising strength was derived from and maybe the same element with respect to direct response should we think about what you've built so far to date.

As a revenue mix component in the business how much of that is located in the US business versus more widely distributed globally and how should we think about that evolving in the years ahead?

Revenue mix component in the business how much of that is located in the U S business versus more widely distributed globally and how should we think about that evolving.

Thanks so much.

Hey, Thanks, Eric so. Remember back at the Analyst Day, we mentioned that we had been 85-15 brand DR. In terms of ads on Twitter. And that the long term goal is to get to 50-50, we said it wouldn't be a straight line to get to 50-50, because for a variety of reasons, we could see brand outperformed DR in any given quarter or in any given year, but we think that over time, that's the right mix for Twitter to be at. We feel like we've made really good progress having rolled out a new version of map, having made a bunch of improvements to website clips including the carousel that we talked about earlier.

Remember back at the Analyst Day, we mentioned that we had been 80 515 brand Dr. In terms of ads on Twitter.

And that the long term goal is to get to 50 50, we said it wouldn't be a straight line to get to 50 50, because for a variety of reasons, we could see brand outperformed Dr. In any given quarter or in any given year, but we think that over time, that's the right mix between the two we feel like we've made really good progress having rolled out a new version of map, having made a bunch of improvements to web site.

<unk>, including the carousel that we talked about earlier.

But it's just not going to be a straight line from here to there and when you look across geographies. There are some that are inherently much heavier in one product or another. Japan being heavier map market is a good example of that. Europe tends to be more map heavy as well.

Such heavier in one product or another Japan being heavier map market is a good example of that Europe tends to be more map heavy as well.

But a lot of it can change from one period to another from one advertiser's campaign to another based on our product rollouts of improvements that we make. So we'll update that 85-15 mix annually for the next one will be in February.

And.

Between now and we'll just continue to give you highlights and give you a sense for all the progress that we're making.

Thanks, Matt.

Your next question is from Colin Sebastian from Baird. Your line is open.

Good afternoon. Thanks, very much I guess first off I think in the letter maybe you mentioned that the uptake with topics in communities just being it has been quite strong with new users. Just wondering if you could talk about the pace of adoption among existing or legacy users as well opting into those newer features. And then just one follow up on the expense outlook I don't know how many people you are retaining from MoPub, but just curious how much of our normal hiring year, but that amount of head count might offset so as we look into 2022.

The uptake with topics in communities just being it has been quite strong with new users. Just wondering if you could talk about the pace of adoption among existing or legacy users as well opting into those newer features and then just one follow up on the expense outlook I don't know how many people you are retaining from a pub, but just curious.

Much of our normal hiring year, but that that amount of head count.

Might offset so as we look into 2022.

Yes on topics. When we launched 2200 new topics in this quarter.

When we launched a trained 300 new topics.

In this quarter.

There is.

There's still a lot to do in terms of applying machine learning and personalization towards both in terms of being able to open up new topics much faster. But also enabling more relevance around the topics. A lot of the suites that I find most valuable these days are right in the home timeline and they're introduced by following topics or a related topic.

But also enabling.

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