Analysis of Solvency Ratios
Quarterly Data
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Twitter Inc., solvency ratios (quarterly data)
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
The financial leverage ratios over the observed periods exhibited a gradual upward trend, rising from 1.45 to a peak above 2.29. This increase suggests a growing use of debt relative to equity in the company's capital structure. Correspondingly, the debt to equity metrics, both excluding and including operating lease liabilities, revealed fluctuations with a general tendency to increase, particularly notable from early 2021 onwards reaching ratios near or above 0.9 when including lease liabilities. This indicates a higher reliance on debt financing over time, with lease obligations making the leverage appear more pronounced.
Analyzing debt to capital ratios, a similar pattern is discernible. The values increased from approximately 0.26 in early 2018 to levels approaching 0.47 by mid-2022 when excluding operational leases. Inclusion of operating lease liabilities results in higher ratios across all periods, with a rise from roughly 0.26 to 0.53, underscoring the impact of lease obligations on the overall debt profile.
The debt to assets ratios mirrored the trend of increased leverage, moving from roughly 0.24 to nearly 0.39 (excluding leases) and up to 0.49 when leases are included. The increasing ratios over time suggest an expansion in debt usage relative to the company’s total asset base.
Examining interest coverage ratios reveals significant variability. Initially, there was an improvement from 1.25 to a peak exceeding 4.19 around early to mid-2019, indicating a robust ability to cover interest expenses from operating earnings. However, from mid-2020 forward, the ratio experienced substantial declines, including negative values in late 2021, signaling periods where operating income was insufficient to meet interest obligations. The volatility in interest coverage during the latter periods, including sharp negative readings followed by recovery attempts, highlights potential earnings volatility and financial stress in certain quarters.
Overall, the data depicts a gradual increase in leverage measures across multiple definitions, demonstrating progressively higher debt levels relative to equity, capital, and assets. At the same time, fluctuating and at times negative interest coverage ratios point to challenges in sustaining earnings that adequately cover interest costs, which may warrant close attention to earnings stability and debt management strategies going forward.
- Debt to Equity and Leverage
- The debt to equity ratio rose from about 0.35 in early 2018 to almost 0.9 by mid-2022, with inclusion of operating lease liabilities pushing this ratio higher throughout. Financial leverage similarly increased, reflecting growing debt reliance.
- Debt to Capital and Debt to Assets
- These ratios followed comparable increasing trends, with debt to capital reaching near 0.5 and debt to assets approaching 0.4 excluding leases; both ratios were higher when including lease liabilities, indicating broader obligations affecting leverage.
- Interest Coverage
- Interest coverage displayed high variability. It improved markedly through 2019, then deteriorated substantially in 2020-2022, including negative values, suggesting earnings’ insufficiency in some periods to cover interest expenses.
- Insights
- The data suggests a strategic shift towards increased debt financing over the observed periods with associated risks implied by volatile earnings before interest, taxes, depreciation, and amortization (EBITDA) performance as evidenced by interest coverage fluctuations.
Debt Ratios
Coverage Ratios
Debt to Equity
Twitter Inc., debt to equity calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||
| Convertible notes, short-term | —) | —) | —) | —) | 953,565) | 953,046) | 917,866) | 905,532) | —) | —) | —) | —) | 923,648) | 910,257) | 897,328) | 884,435) | —) | —) | ||||||
| Finance lease liabilities, short-term | —) | —) | —) | —) | —) | —) | 567) | 3,076) | 7,248) | 13,888) | 23,476) | 33,947) | 45,593) | 57,741) | 68,046) | 75,959) | 82,058) | 86,571) | ||||||
| Convertible notes, long-term | 3,563,136) | 3,561,067) | 3,559,023) | 3,556,934) | 3,554,847) | 3,552,784) | 1,875,878) | 1,858,685) | 2,734,867) | 2,706,038) | 1,816,833) | 1,794,885) | 1,773,092) | 1,751,695) | 1,730,922) | 1,710,065) | 2,560,943) | 1,650,064) | ||||||
| Senior notes, long-term | 1,683,713) | 1,683,114) | 693,996) | 693,744) | 693,491) | 693,241) | 692,994) | 692,742) | 692,489) | 692,240) | 691,967) | —) | —) | —) | —) | —) | —) | —) | ||||||
| Finance lease liabilities, long-term | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | 205) | 3,086) | 7,576) | 14,243) | 24,394) | 37,371) | 53,184) | 71,970) | ||||||
| Total debt | 5,246,849) | 5,244,181) | 4,253,019) | 4,250,678) | 5,201,903) | 5,199,071) | 3,487,305) | 3,460,035) | 3,434,604) | 3,412,166) | 2,532,481) | 1,831,918) | 2,749,909) | 2,733,936) | 2,720,690) | 2,707,830) | 2,696,185) | 1,808,605) | ||||||
| Stockholders’ equity | 5,932,481) | 5,904,916) | 7,307,199) | 7,172,631) | 7,716,128) | 7,736,650) | 7,970,082) | 7,812,088) | 7,658,055) | 8,795,627) | 8,704,386) | 8,415,642) | 8,344,814) | 7,088,819) | 6,805,594) | 6,452,572) | 5,570,904) | 5,210,436) | ||||||
| Solvency Ratio | ||||||||||||||||||||||||
| Debt to equity1 | 0.88 | 0.89 | 0.58 | 0.59 | 0.67 | 0.67 | 0.44 | 0.44 | 0.45 | 0.39 | 0.29 | 0.22 | 0.33 | 0.39 | 0.40 | 0.42 | 0.48 | 0.35 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Debt to Equity, Competitors2 | ||||||||||||||||||||||||
| Alphabet Inc. | 0.06 | 0.06 | 0.06 | 0.06 | 0.06 | 0.06 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Comcast Corp. | 1.02 | 1.00 | 0.99 | 1.01 | 1.04 | 1.12 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Meta Platforms Inc. | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Netflix Inc. | 0.75 | 0.83 | 0.97 | 1.01 | 1.13 | 1.21 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Trade Desk Inc. | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Walt Disney Co. | 0.57 | 0.60 | 0.61 | 0.64 | 0.66 | 0.69 | 0.70 | 0.75 | 0.61 | 0.54 | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q2 2022 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity
= 5,246,849 ÷ 5,932,481 = 0.88
2 Click competitor name to see calculations.
The analysis of the quarterly financial data demonstrates several key trends in the company's capital structure over the observed periods.
- Total Debt
-
Total debt showed fluctuations throughout the timeline. Initial values in early 2018 started around 1.8 billion US dollars and increased significantly to a peak exceeding 2.7 billion by mid-2018. After this peak, there was a notable decline towards the end of 2019, dropping below 2 billion at one point, before rising again steadily to reach over 5 billion US dollars by mid-2022. This reflects a substantial increase in leverage in the most recent quarters compared to earlier periods.
- Stockholders’ Equity
-
Stockholders' equity experienced overall growth from 2018 through early 2020, moving from roughly 5.2 billion to nearly 8.8 billion US dollars, indicating an increase in net assets or retained earnings. However, from mid-2020 onward, equity values trended downward, reaching a low around 5.9 billion by mid-2022. This decline suggests possible asset write-downs, dividends, share repurchases, or losses impacting equity during this later timeframe.
- Debt to Equity Ratio
-
The debt to equity ratio initially fluctuated between approximately 0.35 and 0.48 in 2018. It declined to as low as 0.22 in late 2019, reflecting a stronger equity position relative to debt at that time. Subsequently, the ratio steadily increased, reaching levels close to 0.67 in 2021, and further climbing to around 0.89 by mid-2022. This rising trend indicates a higher reliance on debt financing relative to equity over recent periods.
In summary, the data reveals that while stockholders’ equity grew substantially until early 2020, it has weakened since then in conjunction with an increase in total debt. Consequently, the debt to equity ratio has climbed, suggesting a shifting financial strategy towards greater leverage. This shift implies heightened financial risk but may also reflect efforts to capitalize on low interest rates or invest in growth opportunities requiring increased debt funding.
Debt to Equity (including Operating Lease Liability)
Twitter Inc., debt to equity (including operating lease liability) calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||
| Convertible notes, short-term | —) | —) | —) | —) | 953,565) | 953,046) | 917,866) | 905,532) | —) | —) | —) | —) | 923,648) | 910,257) | 897,328) | 884,435) | —) | —) | ||||||
| Finance lease liabilities, short-term | —) | —) | —) | —) | —) | —) | 567) | 3,076) | 7,248) | 13,888) | 23,476) | 33,947) | 45,593) | 57,741) | 68,046) | 75,959) | 82,058) | 86,571) | ||||||
| Convertible notes, long-term | 3,563,136) | 3,561,067) | 3,559,023) | 3,556,934) | 3,554,847) | 3,552,784) | 1,875,878) | 1,858,685) | 2,734,867) | 2,706,038) | 1,816,833) | 1,794,885) | 1,773,092) | 1,751,695) | 1,730,922) | 1,710,065) | 2,560,943) | 1,650,064) | ||||||
| Senior notes, long-term | 1,683,713) | 1,683,114) | 693,996) | 693,744) | 693,491) | 693,241) | 692,994) | 692,742) | 692,489) | 692,240) | 691,967) | —) | —) | —) | —) | —) | —) | —) | ||||||
| Finance lease liabilities, long-term | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | 205) | 3,086) | 7,576) | 14,243) | 24,394) | 37,371) | 53,184) | 71,970) | ||||||
| Total debt | 5,246,849) | 5,244,181) | 4,253,019) | 4,250,678) | 5,201,903) | 5,199,071) | 3,487,305) | 3,460,035) | 3,434,604) | 3,412,166) | 2,532,481) | 1,831,918) | 2,749,909) | 2,733,936) | 2,720,690) | 2,707,830) | 2,696,185) | 1,808,605) | ||||||
| Operating lease liabilities, short-term | 187,982) | 208,405) | 222,346) | 218,301) | 203,806) | 179,051) | 177,147) | 161,508) | 137,718) | 141,955) | 146,959) | 132,219) | 129,919) | 123,417) | —) | —) | —) | —) | ||||||
| Operating lease liabilities, long-term | 1,282,393) | 1,173,879) | 1,071,209) | 980,764) | 1,026,006) | 899,757) | 819,748) | 727,011) | 560,461) | 582,872) | 609,245) | 580,976) | 614,213) | 628,896) | —) | —) | —) | —) | ||||||
| Total debt (including operating lease liability) | 6,717,224) | 6,626,465) | 5,546,574) | 5,449,743) | 6,431,715) | 6,277,879) | 4,484,200) | 4,348,554) | 4,132,783) | 4,136,993) | 3,288,685) | 2,545,113) | 3,494,041) | 3,486,249) | 2,720,690) | 2,707,830) | 2,696,185) | 1,808,605) | ||||||
| Stockholders’ equity | 5,932,481) | 5,904,916) | 7,307,199) | 7,172,631) | 7,716,128) | 7,736,650) | 7,970,082) | 7,812,088) | 7,658,055) | 8,795,627) | 8,704,386) | 8,415,642) | 8,344,814) | 7,088,819) | 6,805,594) | 6,452,572) | 5,570,904) | 5,210,436) | ||||||
| Solvency Ratio | ||||||||||||||||||||||||
| Debt to equity (including operating lease liability)1 | 1.13 | 1.12 | 0.76 | 0.76 | 0.83 | 0.81 | 0.56 | 0.56 | 0.54 | 0.47 | 0.38 | 0.30 | 0.42 | 0.49 | 0.40 | 0.42 | 0.48 | 0.35 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||||||||||||||||||||
| Alphabet Inc. | 0.10 | 0.10 | 0.10 | 0.11 | 0.11 | 0.11 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Meta Platforms Inc. | 0.13 | 0.11 | 0.11 | 0.09 | 0.09 | 0.09 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Trade Desk Inc. | 0.15 | 0.17 | 0.19 | 0.23 | 0.24 | 0.26 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q2 2022 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Stockholders’ equity
= 6,717,224 ÷ 5,932,481 = 1.13
2 Click competitor name to see calculations.
The financial data reveals several notable trends related to the company's debt levels, equity base, and leverage ratios over the observed periods.
- Total debt (including operating lease liability)
- The total debt exhibited volatility over the reported quarters. Initially, the debt rose significantly from approximately 1.81 billion USD in early 2018 to over 3.49 billion USD by mid-2019, followed by a brief decline in late 2019. The trend resumed upward since early 2020, peaking around 6.72 billion USD by mid-2022. This indicates an overall increasing reliance on debt financing with intermittent fluctuations.
- Stockholders’ equity
- The equity base grew steadily from about 5.21 billion USD in March 2018 to a peak near 8.70 billion USD at the end of 2019. However, starting in early 2020, equity levels declined sharply to around 5.91 billion USD by early 2022 before stabilizing close to 5.93 billion USD mid-2022. This reflects a contraction of shareholder value or retained earnings during this period.
- Debt to equity (including operating lease liability)
- The debt-to-equity ratio demonstrates rising financial leverage over the timeframe. Beginning at a moderate level of 0.35 in early 2018, this ratio increased gradually with some fluctuations, reaching about 0.56 by the end of 2020. Subsequently, it surged markedly to above 1.12 in early to mid-2022. This indicates that debt levels have outpaced equity, suggesting heightened financial risk or strategic leveraging.
In summary, the company’s financial structure shows growing indebtedness coupled with declining equity beyond 2019, resulting in a significant increase in leverage by mid-2022. The elevated debt-to-equity ratio highlights a shift toward more aggressive debt usage, which could impact risk profile and capital costs. Continuous monitoring of these trends is advisable to assess sustainability and financial stability going forward.
Debt to Capital
Twitter Inc., debt to capital calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||
| Convertible notes, short-term | —) | —) | —) | —) | 953,565) | 953,046) | 917,866) | 905,532) | —) | —) | —) | —) | 923,648) | 910,257) | 897,328) | 884,435) | —) | —) | ||||||
| Finance lease liabilities, short-term | —) | —) | —) | —) | —) | —) | 567) | 3,076) | 7,248) | 13,888) | 23,476) | 33,947) | 45,593) | 57,741) | 68,046) | 75,959) | 82,058) | 86,571) | ||||||
| Convertible notes, long-term | 3,563,136) | 3,561,067) | 3,559,023) | 3,556,934) | 3,554,847) | 3,552,784) | 1,875,878) | 1,858,685) | 2,734,867) | 2,706,038) | 1,816,833) | 1,794,885) | 1,773,092) | 1,751,695) | 1,730,922) | 1,710,065) | 2,560,943) | 1,650,064) | ||||||
| Senior notes, long-term | 1,683,713) | 1,683,114) | 693,996) | 693,744) | 693,491) | 693,241) | 692,994) | 692,742) | 692,489) | 692,240) | 691,967) | —) | —) | —) | —) | —) | —) | —) | ||||||
| Finance lease liabilities, long-term | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | 205) | 3,086) | 7,576) | 14,243) | 24,394) | 37,371) | 53,184) | 71,970) | ||||||
| Total debt | 5,246,849) | 5,244,181) | 4,253,019) | 4,250,678) | 5,201,903) | 5,199,071) | 3,487,305) | 3,460,035) | 3,434,604) | 3,412,166) | 2,532,481) | 1,831,918) | 2,749,909) | 2,733,936) | 2,720,690) | 2,707,830) | 2,696,185) | 1,808,605) | ||||||
| Stockholders’ equity | 5,932,481) | 5,904,916) | 7,307,199) | 7,172,631) | 7,716,128) | 7,736,650) | 7,970,082) | 7,812,088) | 7,658,055) | 8,795,627) | 8,704,386) | 8,415,642) | 8,344,814) | 7,088,819) | 6,805,594) | 6,452,572) | 5,570,904) | 5,210,436) | ||||||
| Total capital | 11,179,330) | 11,149,097) | 11,560,218) | 11,423,309) | 12,918,031) | 12,935,721) | 11,457,387) | 11,272,123) | 11,092,659) | 12,207,793) | 11,236,867) | 10,247,560) | 11,094,723) | 9,822,755) | 9,526,284) | 9,160,402) | 8,267,089) | 7,019,041) | ||||||
| Solvency Ratio | ||||||||||||||||||||||||
| Debt to capital1 | 0.47 | 0.47 | 0.37 | 0.37 | 0.40 | 0.40 | 0.30 | 0.31 | 0.31 | 0.28 | 0.23 | 0.18 | 0.25 | 0.28 | 0.29 | 0.30 | 0.33 | 0.26 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Debt to Capital, Competitors2 | ||||||||||||||||||||||||
| Alphabet Inc. | 0.05 | 0.06 | 0.06 | 0.06 | 0.06 | 0.06 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Comcast Corp. | 0.51 | 0.50 | 0.50 | 0.50 | 0.51 | 0.53 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Meta Platforms Inc. | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Netflix Inc. | 0.43 | 0.45 | 0.49 | 0.50 | 0.53 | 0.55 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Trade Desk Inc. | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Walt Disney Co. | 0.36 | 0.38 | 0.38 | 0.39 | 0.40 | 0.41 | 0.41 | 0.43 | 0.38 | 0.35 | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q2 2022 Calculation
Debt to capital = Total debt ÷ Total capital
= 5,246,849 ÷ 11,179,330 = 0.47
2 Click competitor name to see calculations.
The financial data reveals notable trends in the company’s capital structure over the observed periods.
- Total Debt
- Total debt exhibited a general upward trend from the beginning of the period, starting at approximately $1.81 billion and reaching a peak above $5.24 billion near the end of the timeline. While initial increases were gradual, a significant rise is observed starting around early 2021, indicating increased borrowings or financial obligations. There is a slight dip in debt levels in late 2019 but this is followed by continuous growth through 2022.
- Total Capital
- Total capital steadily increased from about $7.02 billion in the earliest quarter to a high approaching $13 billion by mid-2021. Following that peak, a decline is seen but totals remain above $11 billion towards the last reported dates. The fluctuations towards the latter part of the period suggest adjustments in equity or retained earnings alongside growing debt levels.
- Debt to Capital Ratio
- The debt to capital ratio started near 0.26 and showed some volatility, generally staying within the 0.25 to 0.33 range for much of the earlier periods. A downward movement to around 0.18 in late 2019 hints at a temporary reduction in leverage, possibly reflecting capital structure optimization. However, from early 2020 onward, the ratio steadily increased, reaching approximately 0.47 by mid-2022. This increase indicates a rising relative reliance on debt financing in the company’s capital structure.
Overall, the data suggests that the company has progressively increased its debt levels more rapidly than its total capital, particularly in the most recent quarters. This shift in capital structure toward higher leverage may impact financial risk and cost of capital going forward.
Debt to Capital (including Operating Lease Liability)
Twitter Inc., debt to capital (including operating lease liability) calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||
| Convertible notes, short-term | —) | —) | —) | —) | 953,565) | 953,046) | 917,866) | 905,532) | —) | —) | —) | —) | 923,648) | 910,257) | 897,328) | 884,435) | —) | —) | ||||||
| Finance lease liabilities, short-term | —) | —) | —) | —) | —) | —) | 567) | 3,076) | 7,248) | 13,888) | 23,476) | 33,947) | 45,593) | 57,741) | 68,046) | 75,959) | 82,058) | 86,571) | ||||||
| Convertible notes, long-term | 3,563,136) | 3,561,067) | 3,559,023) | 3,556,934) | 3,554,847) | 3,552,784) | 1,875,878) | 1,858,685) | 2,734,867) | 2,706,038) | 1,816,833) | 1,794,885) | 1,773,092) | 1,751,695) | 1,730,922) | 1,710,065) | 2,560,943) | 1,650,064) | ||||||
| Senior notes, long-term | 1,683,713) | 1,683,114) | 693,996) | 693,744) | 693,491) | 693,241) | 692,994) | 692,742) | 692,489) | 692,240) | 691,967) | —) | —) | —) | —) | —) | —) | —) | ||||||
| Finance lease liabilities, long-term | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | 205) | 3,086) | 7,576) | 14,243) | 24,394) | 37,371) | 53,184) | 71,970) | ||||||
| Total debt | 5,246,849) | 5,244,181) | 4,253,019) | 4,250,678) | 5,201,903) | 5,199,071) | 3,487,305) | 3,460,035) | 3,434,604) | 3,412,166) | 2,532,481) | 1,831,918) | 2,749,909) | 2,733,936) | 2,720,690) | 2,707,830) | 2,696,185) | 1,808,605) | ||||||
| Operating lease liabilities, short-term | 187,982) | 208,405) | 222,346) | 218,301) | 203,806) | 179,051) | 177,147) | 161,508) | 137,718) | 141,955) | 146,959) | 132,219) | 129,919) | 123,417) | —) | —) | —) | —) | ||||||
| Operating lease liabilities, long-term | 1,282,393) | 1,173,879) | 1,071,209) | 980,764) | 1,026,006) | 899,757) | 819,748) | 727,011) | 560,461) | 582,872) | 609,245) | 580,976) | 614,213) | 628,896) | —) | —) | —) | —) | ||||||
| Total debt (including operating lease liability) | 6,717,224) | 6,626,465) | 5,546,574) | 5,449,743) | 6,431,715) | 6,277,879) | 4,484,200) | 4,348,554) | 4,132,783) | 4,136,993) | 3,288,685) | 2,545,113) | 3,494,041) | 3,486,249) | 2,720,690) | 2,707,830) | 2,696,185) | 1,808,605) | ||||||
| Stockholders’ equity | 5,932,481) | 5,904,916) | 7,307,199) | 7,172,631) | 7,716,128) | 7,736,650) | 7,970,082) | 7,812,088) | 7,658,055) | 8,795,627) | 8,704,386) | 8,415,642) | 8,344,814) | 7,088,819) | 6,805,594) | 6,452,572) | 5,570,904) | 5,210,436) | ||||||
| Total capital (including operating lease liability) | 12,649,705) | 12,531,381) | 12,853,773) | 12,622,374) | 14,147,843) | 14,014,529) | 12,454,282) | 12,160,642) | 11,790,838) | 12,932,620) | 11,993,071) | 10,960,755) | 11,838,855) | 10,575,068) | 9,526,284) | 9,160,402) | 8,267,089) | 7,019,041) | ||||||
| Solvency Ratio | ||||||||||||||||||||||||
| Debt to capital (including operating lease liability)1 | 0.53 | 0.53 | 0.43 | 0.43 | 0.45 | 0.45 | 0.36 | 0.36 | 0.35 | 0.32 | 0.27 | 0.23 | 0.30 | 0.33 | 0.29 | 0.30 | 0.33 | 0.26 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||||||||||||||||||||
| Alphabet Inc. | 0.09 | 0.09 | 0.09 | 0.10 | 0.10 | 0.10 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Meta Platforms Inc. | 0.11 | 0.10 | 0.10 | 0.09 | 0.08 | 0.08 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Trade Desk Inc. | 0.13 | 0.14 | 0.16 | 0.18 | 0.20 | 0.21 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q2 2022 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 6,717,224 ÷ 12,649,705 = 0.53
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals noteworthy trends in debt levels, capital structure, and leverage ratios over the periods examined.
- Total Debt (including operating lease liability)
-
The total debt exhibited an overall upward trajectory from March 31, 2018, through June 30, 2022. Initially recorded at approximately 1.81 billion US dollars, debt increased sharply reaching a peak near 3.49 billion by March and June 2019. After some fluctuations, there was a significant rise beginning in early 2021, with debt climbing from approximately 6.28 billion in March 2021 to about 6.72 billion by June 2022. This suggests a growing reliance on borrowed funds or lease liabilities over time, particularly in the later periods.
- Total Capital (including operating lease liability)
-
Total capital also rose during the period but displayed more fluctuation than total debt. Starting at about 7.02 billion US dollars in early 2018, capital increased to nearly 11.84 billion by mid-2019. There was a slight decline and stabilization toward the end of 2019 and into mid-2020, followed by a notable increase again in 2021, peaking at approximately 14.15 billion in June 2021. However, a decrease occurred toward mid-2022, with capital values dropping to around 12.65 billion. This indicates shifts in the overall capital base, possibly reflecting changes in equity, debt, or retained earnings.
- Debt to Capital Ratio (including operating lease liability)
-
The debt to capital ratio conveys the proportion of total capital financed by debt. The ratio initially stood at 0.26 in early 2018, climbing to peaks near 0.33 in early 2019, then falling to a low around 0.23 in late 2019. From 2020 onwards, the ratio exhibits an increasing trend, rising from 0.32 in early 2020 to approximately 0.53 by mid-2022. This increase signals that debt occupies a growing portion of the capital structure, possibly indicating increased financial leverage or changes in funding strategy.
Overall, the data portrays a company progressively increasing its leverage over the examined period, with total debt rising at a faster rate than total capital, especially from 2020 onward. The growing debt to capital ratio suggests heightened financial risk exposure, potentially attributable to strategic borrowing or operational needs. Capital levels, although generally increasing, display some volatility, hinting at dynamic shifts in equity and liabilities components. These trends warrant close monitoring concerning interest obligations and capital management.
Debt to Assets
Twitter Inc., debt to assets calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||
| Convertible notes, short-term | —) | —) | —) | —) | 953,565) | 953,046) | 917,866) | 905,532) | —) | —) | —) | —) | 923,648) | 910,257) | 897,328) | 884,435) | —) | —) | ||||||
| Finance lease liabilities, short-term | —) | —) | —) | —) | —) | —) | 567) | 3,076) | 7,248) | 13,888) | 23,476) | 33,947) | 45,593) | 57,741) | 68,046) | 75,959) | 82,058) | 86,571) | ||||||
| Convertible notes, long-term | 3,563,136) | 3,561,067) | 3,559,023) | 3,556,934) | 3,554,847) | 3,552,784) | 1,875,878) | 1,858,685) | 2,734,867) | 2,706,038) | 1,816,833) | 1,794,885) | 1,773,092) | 1,751,695) | 1,730,922) | 1,710,065) | 2,560,943) | 1,650,064) | ||||||
| Senior notes, long-term | 1,683,713) | 1,683,114) | 693,996) | 693,744) | 693,491) | 693,241) | 692,994) | 692,742) | 692,489) | 692,240) | 691,967) | —) | —) | —) | —) | —) | —) | —) | ||||||
| Finance lease liabilities, long-term | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | 205) | 3,086) | 7,576) | 14,243) | 24,394) | 37,371) | 53,184) | 71,970) | ||||||
| Total debt | 5,246,849) | 5,244,181) | 4,253,019) | 4,250,678) | 5,201,903) | 5,199,071) | 3,487,305) | 3,460,035) | 3,434,604) | 3,412,166) | 2,532,481) | 1,831,918) | 2,749,909) | 2,733,936) | 2,720,690) | 2,707,830) | 2,696,185) | 1,808,605) | ||||||
| Total assets | 13,579,287) | 13,550,957) | 14,059,516) | 14,589,345) | 15,323,225) | 14,984,075) | 13,379,090) | 13,088,792) | 12,547,587) | 13,540,725) | 12,703,389) | 11,600,925) | 12,521,607) | 11,145,231) | 10,162,572) | 9,746,192) | 8,861,230) | 7,539,441) | ||||||
| Solvency Ratio | ||||||||||||||||||||||||
| Debt to assets1 | 0.39 | 0.39 | 0.30 | 0.29 | 0.34 | 0.35 | 0.26 | 0.26 | 0.27 | 0.25 | 0.20 | 0.16 | 0.22 | 0.25 | 0.27 | 0.28 | 0.30 | 0.24 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Debt to Assets, Competitors2 | ||||||||||||||||||||||||
| Alphabet Inc. | 0.04 | 0.04 | 0.04 | 0.04 | 0.04 | 0.04 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Comcast Corp. | 0.35 | 0.35 | 0.34 | 0.35 | 0.36 | 0.37 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Meta Platforms Inc. | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Netflix Inc. | 0.31 | 0.32 | 0.35 | 0.36 | 0.38 | 0.39 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Trade Desk Inc. | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Walt Disney Co. | 0.26 | 0.27 | 0.27 | 0.28 | 0.28 | 0.29 | 0.29 | 0.31 | 0.27 | 0.24 | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q2 2022 Calculation
Debt to assets = Total debt ÷ Total assets
= 5,246,849 ÷ 13,579,287 = 0.39
2 Click competitor name to see calculations.
The analysis of the financial data reveals several notable trends and patterns related to the company's leverage and asset base across the examined periods.
- Total Debt
- The total debt shows a general upward trend over the full time span, increasing from approximately 1.81 billion US dollars at the beginning of 2018 to about 5.25 billion US dollars by mid-2022. There are fluctuations within this period; for instance, a significant decrease occurred around the third quarter of 2019 before rising again towards the end of 2019. After that, total debt steadily increased, with particularly sharp growth observed between 2020 and mid-2021, stabilizing somewhat thereafter but remaining considerably elevated compared to the earlier years.
- Total Assets
- Total assets also display growth, rising from approximately 7.54 billion US dollars at the end of the first quarter of 2018 to nearly 13.58 billion US dollars by mid-2022. The asset base showed consistent expansion until early 2021 when assets peaked near 15.32 billion US dollars but experienced a reduction following that peak, decreasing gradually into 2022. Despite this decline, the overall asset level remains significantly higher than at the beginning of the period, reflecting broad growth in company resources.
- Debt to Assets Ratio
- The debt-to-assets ratio fluctuates throughout the period, indicating varying leverage levels relative to asset base changes. Initially, the ratio rises from 0.24 to 0.30 in the first half of 2018, then declines to a low of 0.16 in the third quarter of 2019, suggesting reduced leverage at that point. Subsequently, the ratio trends upward again, peaking at approximately 0.39 in 2022, the highest observed ratio across the timeline. This reflects a significant increase in leverage, signaling a greater proportion of debt financing relative to assets in recent periods compared to earlier years.
In summary, the company demonstrates an increasing use of debt over time, accompanied by growth and later slight contraction in its asset base. The rising debt-to-assets ratio in recent years points to a heightened financial leverage, which may impact financial risk and capital structure strategy. Monitoring this ratio will be important for assessing future solvency and risk profiles.
Debt to Assets (including Operating Lease Liability)
Twitter Inc., debt to assets (including operating lease liability) calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||
| Convertible notes, short-term | —) | —) | —) | —) | 953,565) | 953,046) | 917,866) | 905,532) | —) | —) | —) | —) | 923,648) | 910,257) | 897,328) | 884,435) | —) | —) | ||||||
| Finance lease liabilities, short-term | —) | —) | —) | —) | —) | —) | 567) | 3,076) | 7,248) | 13,888) | 23,476) | 33,947) | 45,593) | 57,741) | 68,046) | 75,959) | 82,058) | 86,571) | ||||||
| Convertible notes, long-term | 3,563,136) | 3,561,067) | 3,559,023) | 3,556,934) | 3,554,847) | 3,552,784) | 1,875,878) | 1,858,685) | 2,734,867) | 2,706,038) | 1,816,833) | 1,794,885) | 1,773,092) | 1,751,695) | 1,730,922) | 1,710,065) | 2,560,943) | 1,650,064) | ||||||
| Senior notes, long-term | 1,683,713) | 1,683,114) | 693,996) | 693,744) | 693,491) | 693,241) | 692,994) | 692,742) | 692,489) | 692,240) | 691,967) | —) | —) | —) | —) | —) | —) | —) | ||||||
| Finance lease liabilities, long-term | —) | —) | —) | —) | —) | —) | —) | —) | —) | —) | 205) | 3,086) | 7,576) | 14,243) | 24,394) | 37,371) | 53,184) | 71,970) | ||||||
| Total debt | 5,246,849) | 5,244,181) | 4,253,019) | 4,250,678) | 5,201,903) | 5,199,071) | 3,487,305) | 3,460,035) | 3,434,604) | 3,412,166) | 2,532,481) | 1,831,918) | 2,749,909) | 2,733,936) | 2,720,690) | 2,707,830) | 2,696,185) | 1,808,605) | ||||||
| Operating lease liabilities, short-term | 187,982) | 208,405) | 222,346) | 218,301) | 203,806) | 179,051) | 177,147) | 161,508) | 137,718) | 141,955) | 146,959) | 132,219) | 129,919) | 123,417) | —) | —) | —) | —) | ||||||
| Operating lease liabilities, long-term | 1,282,393) | 1,173,879) | 1,071,209) | 980,764) | 1,026,006) | 899,757) | 819,748) | 727,011) | 560,461) | 582,872) | 609,245) | 580,976) | 614,213) | 628,896) | —) | —) | —) | —) | ||||||
| Total debt (including operating lease liability) | 6,717,224) | 6,626,465) | 5,546,574) | 5,449,743) | 6,431,715) | 6,277,879) | 4,484,200) | 4,348,554) | 4,132,783) | 4,136,993) | 3,288,685) | 2,545,113) | 3,494,041) | 3,486,249) | 2,720,690) | 2,707,830) | 2,696,185) | 1,808,605) | ||||||
| Total assets | 13,579,287) | 13,550,957) | 14,059,516) | 14,589,345) | 15,323,225) | 14,984,075) | 13,379,090) | 13,088,792) | 12,547,587) | 13,540,725) | 12,703,389) | 11,600,925) | 12,521,607) | 11,145,231) | 10,162,572) | 9,746,192) | 8,861,230) | 7,539,441) | ||||||
| Solvency Ratio | ||||||||||||||||||||||||
| Debt to assets (including operating lease liability)1 | 0.49 | 0.49 | 0.39 | 0.37 | 0.42 | 0.42 | 0.34 | 0.33 | 0.33 | 0.31 | 0.26 | 0.22 | 0.28 | 0.31 | 0.27 | 0.28 | 0.30 | 0.24 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||||||||||||||||||||
| Alphabet Inc. | 0.07 | 0.07 | 0.07 | 0.07 | 0.08 | 0.08 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Meta Platforms Inc. | 0.09 | 0.09 | 0.08 | 0.07 | 0.07 | 0.07 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Trade Desk Inc. | 0.07 | 0.08 | 0.08 | 0.10 | 0.10 | 0.11 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q2 2022 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 6,717,224 ÷ 13,579,287 = 0.49
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends concerning the company’s leverage and asset base over the examined periods.
- Total Debt (Including Operating Lease Liability)
- Total debt exhibited a generally increasing trend from the first quarter of 2018 to the second quarter of 2022. The debt rose from approximately $1.81 billion in March 2018 to about $6.72 billion by June 2022. There were some fluctuations within this overall growth pattern, such as a notable decrease during the second and third quarters of 2019 before resuming its upward trajectory into 2021 and 2022. The sharp increase in debt beginning in early 2021 signals a potential strategy of increased leverage or financing activities during that period.
- Total Assets
- Total assets also showed a positive growth trajectory from around $7.54 billion at the beginning of 2018 to a peak of approximately $15.32 billion in mid-2021. However, following this peak, total assets declined moderately, reaching about $13.58 billion by mid-2022. This decline after mid-2021 could reflect asset disposals, impairments, or changes in business operations affecting the asset base. Despite this correction, assets remained substantially higher than the initial periods.
- Debt to Assets Ratio (Including Operating Lease Liability)
- The debt to assets ratio indicates the proportion of assets financed by debt. This ratio increased from 0.24 in the first quarter of 2018 to levels around 0.42 in mid-2021, with further rises reaching 0.49 by mid-2022. The steady rise of this ratio implies an increase in financial leverage over time, with debt growing at a faster pace than assets, particularly notable from 2020 onward. This trend can be interpreted as an increased reliance on debt financing relative to available asset base, which may influence the company’s risk profile.
In summary, the company has progressively increased its indebtedness relative to assets over the timeframe, especially in the period from 2020 to 2022. Total assets grew significantly up to mid-2021 before experiencing a decline, while total debt consistently rose, amplifying the leverage ratio. This pattern suggests a strategic shift towards greater leverage that warrants monitoring for impacts on financial stability and credit risk moving forward.
Financial Leverage
Twitter Inc., financial leverage calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||
| Total assets | 13,579,287) | 13,550,957) | 14,059,516) | 14,589,345) | 15,323,225) | 14,984,075) | 13,379,090) | 13,088,792) | 12,547,587) | 13,540,725) | 12,703,389) | 11,600,925) | 12,521,607) | 11,145,231) | 10,162,572) | 9,746,192) | 8,861,230) | 7,539,441) | ||||||
| Stockholders’ equity | 5,932,481) | 5,904,916) | 7,307,199) | 7,172,631) | 7,716,128) | 7,736,650) | 7,970,082) | 7,812,088) | 7,658,055) | 8,795,627) | 8,704,386) | 8,415,642) | 8,344,814) | 7,088,819) | 6,805,594) | 6,452,572) | 5,570,904) | 5,210,436) | ||||||
| Solvency Ratio | ||||||||||||||||||||||||
| Financial leverage1 | 2.29 | 2.29 | 1.92 | 2.03 | 1.99 | 1.94 | 1.68 | 1.68 | 1.64 | 1.54 | 1.46 | 1.38 | 1.50 | 1.57 | 1.49 | 1.51 | 1.59 | 1.45 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Financial Leverage, Competitors2 | ||||||||||||||||||||||||
| Alphabet Inc. | 1.39 | 1.41 | 1.43 | 1.42 | 1.41 | 1.42 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Comcast Corp. | 2.92 | 2.89 | 2.87 | 2.89 | 2.92 | 3.01 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Meta Platforms Inc. | 1.35 | 1.33 | 1.33 | 1.27 | 1.23 | 1.22 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Netflix Inc. | 2.43 | 2.58 | 2.81 | 2.79 | 2.96 | 3.11 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Trade Desk Inc. | 2.06 | 2.08 | 2.34 | 2.29 | 2.32 | 2.40 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Walt Disney Co. | 2.23 | 2.26 | 2.30 | 2.33 | 2.34 | 2.40 | 2.41 | 2.42 | 2.28 | 2.24 | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q2 2022 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= 13,579,287 ÷ 5,932,481 = 2.29
2 Click competitor name to see calculations.
The analysis of the financial metrics over the presented periods reveals several notable trends in the company's financial position and leverage structure.
- Total Assets
- The total assets demonstrate a generally upward trajectory from March 31, 2018, to June 30, 2021, increasing from approximately 7.5 billion USD to a peak near 15.3 billion USD. This growth suggests expansion or accumulation of resources. However, after reaching this high point, total assets show a declining tendency towards mid-2022, falling to around 13.6 billion USD. This decline may indicate asset sales, depreciation, or other adjustments.
- Stockholders’ Equity
- Stockholders’ equity exhibits growth from March 31, 2018, starting at approximately 5.2 billion USD and rising consistently through 2019 to a peak of over 8.7 billion USD by December 31, 2019. Nevertheless, from March 31, 2020, equity values begin to fluctuate downward, dipping significantly in subsequent quarters, hitting roughly 5.9 billion USD by June 30, 2022. This decrease in equity during this latter period suggests possible net losses, dividend payments, or share buybacks affecting the equity base.
- Financial Leverage
- The financial leverage ratio fluctuates over time but shows a clear increasing trend especially from 2020 onward. Starting at 1.45 in March 2018, it gradually moves upward with some variability, reaching values above 2.0 by late 2021 and sustaining levels near 2.29 by mid-2022. An increasing leverage ratio indicates a growing proportion of debt relative to equity, implying higher financial risk and possible reliance on external financing.
In summary, the data points to an initial phase of asset and equity growth until around the end of 2019, followed by a period characterized by declining equity and asset levels coupled with rising leverage. This pattern may indicate financial stress or strategic financial restructuring during the recent periods examined.
Interest Coverage
Twitter Inc., interest coverage calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||||||||||||||||||||
| Net income (loss) | (270,007) | 513,286) | 181,694) | (536,757) | 65,649) | 68,005) | 222,116) | 28,659) | (1,378,005) | (8,396) | 118,773) | 36,522) | 1,119,560) | 190,804) | 255,303) | 789,179) | 100,117) | 60,997) | ||||||
| Add: Income tax expense | (65,897) | 315,367) | 2,971) | (190,325) | 15,651) | (18,001) | 1,903) | 1,024) | 1,088,899) | (7,139) | 39,321) | 11,241) | (1,031,781) | (94,301) | (48,766) | (701,921) | (34,250) | 2,885) | ||||||
| Add: Interest expense | 23,342) | 15,444) | 10,824) | 13,284) | 13,893) | 13,185) | 40,166) | 39,614) | 39,828) | 33,270) | 26,377) | 36,226) | 38,317) | 37,260) | 37,273) | 38,336) | 29,982) | 27,015) | ||||||
| Earnings before interest and tax (EBIT) | (312,562) | 844,097) | 195,489) | (713,798) | 95,193) | 63,189) | 264,185) | 69,297) | (249,278) | 17,735) | 184,471) | 83,989) | 126,096) | 133,763) | 243,810) | 125,594) | 95,849) | 90,897) | ||||||
| Solvency Ratio | ||||||||||||||||||||||||
| Interest coverage1 | 0.21 | 7.88 | -7.03 | -3.62 | 4.60 | 1.11 | 0.67 | 0.16 | 0.27 | 3.07 | 3.82 | 3.94 | 4.16 | 4.19 | 4.19 | 3.54 | 2.86 | 1.25 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Interest Coverage, Competitors2 | ||||||||||||||||||||||||
| Comcast Corp. | 5.43 | 5.57 | 5.46 | 5.67 | 4.94 | 4.54 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Netflix Inc. | 8.83 | 8.62 | 8.63 | 8.49 | 7.41 | 6.71 | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q2 2022 Calculation
Interest coverage
= (EBITQ2 2022
+ EBITQ1 2022
+ EBITQ4 2021
+ EBITQ3 2021)
÷ (Interest expenseQ2 2022
+ Interest expenseQ1 2022
+ Interest expenseQ4 2021
+ Interest expenseQ3 2021)
= (-312,562 + 844,097 + 195,489 + -713,798)
÷ (23,342 + 15,444 + 10,824 + 13,284)
= 0.21
2 Click competitor name to see calculations.
The financial data over the observed quarters reveals considerable volatility in earnings before interest and tax (EBIT), interest expense, and interest coverage ratios. The fluctuations indicate varying operational performance and differing abilities to meet interest obligations over time.
- Earnings before interest and tax (EBIT)
- EBIT demonstrates pronounced fluctuations, with an initial growth trend from around $90.9 million to a peak near $243.8 million in the last quarter of 2018. After that, a decline is noted through parts of 2019, followed by a sharp negative dip in the mid-2020 period, reaching negative $249.3 million, indicating a substantial operational loss during that quarter. Subsequently, EBIT recovers, reaching positive territory again with peaks observed in late 2020 and early 2022, such as $264.2 million and $844.1 million respectively. However, sporadic significant negative values also reoccur, for example, the close of 2021 showed a strong negative EBIT of around $-713.8 million. Overall, EBIT shows high volatility with alternating periods of profitability and loss, suggesting episodic operational challenges and recoveries.
- Interest Expense
- Interest expense remains more stable compared with EBIT but shows a mild upward trend initially, ranging generally between approximately $26.4 million and $40.2 million from early 2018 through 2020. Starting in 2021, interest expense appears to decrease, dipping to lows around $10.8 million to $13.9 million in early quarters of 2022. This reduction in interest expense could be indicative of decreased debt levels or refinancing at more favorable rates. Despite this, expenses remain significant and represent a persistent financial obligation.
- Interest Coverage Ratio
- Interest coverage ratio, which measures the ability to cover interest payments with EBIT, shows a wide range of values corresponding to shifts in EBIT and interest expense. In the early periods of 2018, the ratio rose steadily from 1.25 to values exceeding 4.0, indicating healthy coverage. During 2019 and early 2020, this ratio gradually declines but mostly remains above 3.0, signaling sufficient ability to service interest. However, from mid-2020 onwards, the ratio plunges dramatically, reaching a low of 0.16 and even negative values such as -3.62 and -7.03 in 2021, reflecting periods where EBIT was negative or insufficient and thus the company could not cover its interest expenses from operating earnings. By early 2022, the interest coverage ratio displays a marked improvement to values around 7.88, though it decreases again in subsequent months to 0.21, indicating ongoing volatility in financial health and ability to meet interest obligations.
In summary, the company experienced substantial operational earnings volatility with alternating periods of considerable profitability and deep losses. Interest expenses, while mostly stable, showed a downward trend in recent periods, potentially due to debt management strategies. The interest coverage ratio mirrored EBIT volatility, with periods of strong coverage interspersed with significant shortfalls in the ability to cover interest expenses, signaling intermittent financial stress and recovery phases. These patterns highlight the importance of monitoring operational efficiency and debt servicing capability to sustain financial stability.