Twitter Inc. (NYSE:TWTR)

The financial data reflects the cash flow performance over a five-year period. Key metrics under review include net cash provided by operating activities and free cash flow to the firm (FCFF), both measured in thousands of US dollars.

Net Cash Provided by Operating Activities

The net cash from operating activities exhibits a general upward trend from 2017 through 2019, increasing from 831,209 to 1,339,711, then slightly decreasing to 1,303,364 in 2019. This peak is followed by a noticeable decline in 2020 to 992,870 and a further reduction in 2021 to 632,689. The data indicates a strong operating cash inflow initially, which progressively diminishes in the latter years, signifying potential operational challenges or changes in cash collection and payment cycles.

Free Cash Flow to the Firm (FCFF)

The FCFF values show a positive trajectory from 2017 to 2018, rising from 684,684 to 883,262. However, following this peak, FCFF declines in 2019 to 782,134 and experiences a sharp drop in 2020 to only 162,111. The trend culminates in a negative free cash flow of -347,098 in 2021, indicating that the firm's capital expenditures and other outflows exceeded its operating cash inflows. This negative figure in 2021 could signal increased investment activities or deteriorating cash generation capacity.

Overall, while operating cash flows were robust in the earlier years, there is a downward trend starting in 2019, culminating in declining cash generation ability by 2021. Free cash flow, closely related to operating cash flow but adjusted for investments, similarly declines and turns negative by the final period. This suggests increased expenditures or reduced efficiency in managing cash flows relative to operations. These trends warrant attention to operational efficiency, capital spending, and cash management strategies going forward.

The financial data reveals several noteworthy trends in the effective income tax rate and interest-related cash flows from the end of 2017 through the end of 2021.

Effective Income Tax Rate (EITR)

The effective income tax rate exhibits a relatively stable pattern from 2018 through 2020, consistently recorded at 21%. This rate had a significant decline from 35% in 2017 to 21% in 2018, indicating a considerable reduction in tax burden or benefits realized during that period. However, in 2021, there is a marked and substantial increase to 46.14%, more than doubling from the prior years' rates. This sharp rise could suggest a change in tax policy, lower tax credits, adjustments due to prior periods, or increased taxable income subject to higher tax rates.

Interest Paid in Cash, Net of Tax

Interest paid in cash, net of tax, shows an overall increasing trend over the five-year period. The amount rose from 9,094 thousand US dollars in 2017 to 11,492 thousand in 2018, followed by a slight decrease to 9,666 thousand in 2019. A significant jump occurs in 2020 to 30,423 thousand, which is more than triple the 2019 value. This elevated level reduces to 22,489 thousand in 2021 but remains substantially higher than the years before 2020. This pattern may reflect changes in debt levels, interest rates, or refinancing activities undertaken around 2020.

Interest Costs Capitalized, Net of Tax

Interest costs capitalized, net of tax, present a mixed trend. The figures start at 2,340 thousand US dollars in 2017 and increase annually to 3,634 thousand in 2019, indicating a steady rise in capitalized interest costs over this initial period. In 2020, there is a slight decline to 3,002 thousand, followed by a more pronounced drop to 808 thousand in 2021. The sharp decline in 2021 suggests a reduction in capitalizable projects or a strategic shift in accounting practices regarding interest capitalization.

Overall, the data highlights increased financial costs associated with interest payments, particularly around 2020, alongside a volatile effective tax rate with a notable increase in 2021. The fluctuations in capitalized interest costs suggest changes in investment or asset development activities over the period. These trends could have significant implications for the company’s profitability and cash flow management.

Enterprise Value (EV)

The Enterprise Value exhibited a fluctuating trend over the five-year period. From 2017 to 2018, there was a slight decrease from approximately 21.9 billion US dollars to about 20.1 billion. In 2019, EV increased significantly to roughly 26.2 billion, followed by a sharp rise to approximately 53.3 billion in 2020. However, in 2021, the value decreased notably to around 26.9 billion. This indicates considerable volatility in the company's valuation during the observed years.

Free Cash Flow to the Firm (FCFF)

The FCFF figures demonstrate variability with an overall downward movement towards the end of the period. It began at approximately 685 million US dollars in 2017 and increased to about 883 million in 2018. The value then declined slightly to around 782 million in 2019 and dropped sharply in 2020 to 162 million. By 2021, FCFF turned negative, reaching -347 million, which could raise concerns regarding cash flow generation from operating activities relative to capital expenditures.

EV to FCFF Ratio (EV/FCFF)

This valuation ratio mirrored significant volatility and an extreme spike within the period under review. The ratio started at 32.01 in 2017, decreased to 22.76 in 2018, then increased again to 33.53 in 2019. In 2020, there was an extraordinary jump to 328.88, indicating an unusually high enterprise value relative to free cash flow. No ratio is reported for 2021, likely due to the negative FCFF, which complicates meaningful calculation or interpretation of this metric.