Twitter Inc. (NYSE:TWTR)

The financial data reveals several notable trends regarding intangible assets over the observed years.

Goodwill

Goodwill showed a steady increase from 1,188,935 thousand US dollars in 2017 to a peak of 1,312,346 thousand in 2020. However, in 2021, there was a slight decline to 1,301,520 thousand, suggesting stabilization or a minor reduction after years of growth.

Patents and Developed Technologies

This asset category remained relatively stable between 2017 and 2019, with values around 93,000 to 97,000 thousand US dollars. A marked increase occurred in 2020, reaching 110,153 thousand, followed by a slight decrease to 106,261 thousand in 2021, indicating investments or revaluations peaking in 2020.

Assembled Workforce

Data is available only for 2021, indicating a recorded value of 23,500 thousand US dollars. The lack of previous data makes it difficult to discern trends, but its introduction in 2021 suggests either a new valuation approach or acquisition.

Publisher and Advertiser Relationships and Other Intangibles

Publisher and advertiser relationships were recorded at 9,300 thousand in 2017 and 2018 but absent in subsequent years, implying divestiture, impairment, or reclassification. An amount of 1,800 thousand under "Other" appears in 2020 only, which may reflect a one-time recognition of certain intangible assets.

Intangible Assets, Gross Carrying Value

This aggregate figure showed a downward trend from 102,811 thousand in 2017 to 96,636 thousand in 2019 but then increased to 111,953 thousand in 2020 and further to 129,761 thousand in 2021, indicating renewed investments or acquisitions in intangible assets during the latter years.

Accumulated Amortization

Accumulated amortization fluctuated, starting at -53,157 thousand in 2017, increasing in magnitude to -57,486 thousand in 2018, then decreasing sharply to -41,530 thousand in 2019, followed by subsequent increases to -53,615 thousand in 2020 and -60,437 thousand in 2021. This irregular pattern may suggest adjustments in amortization policies or impairment charges across periods.

Intangible Assets, Net Carrying Value

The net value of intangible assets decreased initially from 49,654 thousand in 2017 to 45,025 thousand in 2018, rebounded to 55,106 thousand in 2019, and continued an upward trend reaching 69,324 thousand by 2021. Overall, this points to a positive valuation trend over the long term after initial declines.

Goodwill and Intangible Assets Total

The combined total of goodwill and intangible assets increased consistently from 1,238,589 thousand in 2017 to 1,370,684 thousand in 2020, with a marginal rise to 1,370,844 thousand in 2021. This steady growth indicates continued investment or acquisition activity contributing to the company’s intangible asset base.

The financial data reveals notable trends in both reported and goodwill adjusted metrics over the five-year period.

Total Assets

The reported total assets demonstrated a steady increase from 7,412,477 thousand USD at the end of 2017 to 14,059,516 thousand USD by the end of 2021, reflecting an overall growth of approximately 90%. This growth trend suggests an expansion in the company's asset base, potentially indicating increased investment or acquisition activities. Similarly, the adjusted total assets, which exclude goodwill, also increased consistently from 6,223,542 thousand USD in 2017 to 12,757,996 thousand USD in 2021, showing a comparable upward trend but at slightly lower absolute values due to the exclusion of goodwill.

Stockholders’ Equity

In contrast to total assets, reported stockholders’ equity experienced growth from 5,047,218 thousand USD in 2017 to a peak of 8,704,386 thousand USD in 2019. However, after 2019, it declined to 7,970,082 thousand USD in 2020 and further to 7,307,199 thousand USD in 2021, indicating a decrease of approximately 16% from its peak. The adjusted stockholders’ equity followed a similar pattern, increasing from 3,858,283 thousand USD in 2017 to 7,447,687 thousand USD in 2019 before declining to 6,657,736 thousand USD in 2020 and 6,005,679 thousand USD in 2021. This downward shift post-2019 suggests factors such as net losses, dividend distributions, or other equity-reducing events influenced the equity base during the latter years.

Goodwill Impact

The difference between reported and adjusted figures reflects the impact of goodwill on the financial position. Both total assets and stockholders’ equity values are consistently higher in the reported figures due to the inclusion of goodwill. Goodwill appears to represent a significant portion of the company’s reported assets and equity, highlighting the importance of considering adjusted figures for assessments excluding intangible asset valuations. The sustained growth in adjusted total assets suggests that the company’s core tangible and other net assets expanded substantially over the period despite the decline in equity after 2019.

The financial data exhibits several notable trends over the five-year period from 2017 to 2021.

Total Asset Turnover

The reported total asset turnover shows a general decline from 0.33 in 2017 to 0.27 in 2019, followed by a slight recovery reaching 0.36 in 2021. The adjusted total asset turnover, which accounts for goodwill, follows a similar trend but at a consistently higher level, starting at 0.39 in 2017, dipping to 0.3 in 2019, and increasing to 0.4 by 2021. This suggests a decrease in asset efficiency during the middle years with improvement in the later years, and overall higher efficiency when goodwill is excluded.

Financial Leverage

Reported financial leverage demonstrates a steady increase over the period, rising from 1.47 in 2017 to 1.92 in 2021. Adjusted financial leverage follows the same upward trajectory but is higher throughout, starting at 1.61 and reaching 2.12 by 2021. This increasing trend indicates a growing reliance on debt or other liabilities relative to equity, with the adjusted figures pointing to greater leverage when goodwill is removed from consideration.

Return on Equity (ROE)

The reported ROE shows significant volatility, starting at a negative -2.14% in 2017, peaking at 17.71% in 2018, and maintaining a relatively high level in 2019 at 16.84%. However, it sharply declines afterward to -14.25% in 2020 and slightly recovers to -3.03% in 2021. The adjusted ROE follows a similar pattern but is consistently lower in negative years and higher in positive years, ranging from -2.8% to 21.61%. This variability reflects fluctuations in profitability and the impact of goodwill adjustments on equity returns.

Return on Assets (ROA)

The reported ROA mirrors the ROE trend but with less pronounced swings, beginning at -1.46% in 2017, rising to 11.86% in 2018, and slightly decreasing to 11.54% in 2019. Subsequently, it drops to negative values in 2020 (-8.49%) and improves modestly to -1.57% in 2021. The adjusted ROA is consistently slightly more negative in downturn years and more positive in up years compared to reported ROA, ranging from -1.74% to 13.49%. This indicates that asset profitability has been variable, with goodwill adjustments exacerbating both losses and gains slightly.

Overall, the analysis reveals a period of unstable profitability and fluctuating asset efficiency, accompanied by increasing financial leverage. The adjustments for goodwill generally amplify the observed trends in turnover, leverage, and profitability measures, reflecting the influence of intangible asset valuation on the financial performance metrics.

The analysis of the annual financial data reveals several notable trends and developments over the five-year period.

Total Assets

The reported total assets demonstrate a consistent year-over-year increase, rising from approximately $7.41 billion at the end of 2017 to about $14.06 billion by the end of 2021. This represents near-doubling of the asset base, indicative of significant growth or acquisition activity.

When adjusted for goodwill, the total assets also show a similar upward trajectory, though at lower absolute values. Adjusted total assets increase steadily from around $6.22 billion in 2017 to about $12.76 billion in 2021, reflecting the exclusion of intangible goodwill values while maintaining the overall growth trend. The consistent gap between reported and adjusted values highlights a substantial and sustained goodwill component within the asset base.

Total Asset Turnover Ratios

The reported total asset turnover ratio declines gradually from 0.33 in 2017 to a low of 0.27 in 2019, before improving to 0.36 by 2021. This pattern suggests that asset utilization efficiency initially weakened, perhaps due to rapid asset base expansion outpacing revenue growth, but recovery occurs in the latter years, reaching the highest level in this period by 2021.

The adjusted total asset turnover ratio follows a comparable pattern but at consistently higher levels than the reported figures. It decreases from 0.39 in 2017 to 0.30 in 2019, then climbs to 0.40 in 2021. This indicates that excluding goodwill leads to a clearer picture of asset productivity, showing improvements in efficiency after 2019 more distinctly than the reported data.

Overall, the financial metrics reveal an expanding asset base accompanied by fluctuating efficiency in asset utilization, with a marked improvement in the later years of the period. The adjusted figures emphasize the impact of goodwill on the asset base and suggest enhanced operational performance when intangible assets are excluded.

Total assets

The reported total assets exhibit a steady upward trend from 7.41 billion US dollars at the end of 2017 to 14.06 billion US dollars by the end of 2021, nearly doubling over the five-year period. The adjusted total assets, which exclude goodwill, follow a similar growth pattern but at slightly lower absolute values. This consistent increase indicates ongoing asset accumulation and expansion of the company’s asset base.

Stockholders’ equity

Reported stockholders’ equity increases significantly from 5.05 billion US dollars in 2017 to a peak of 8.7 billion in 2019. However, it declines thereafter, falling to 7.97 billion in 2020 and further to 7.31 billion in 2021. The adjusted stockholders’ equity, which accounts for goodwill adjustments, mirrors this pattern with an initial increase followed by a decrease. This downward trend in equity after 2019 suggests potential challenges impacting retained earnings or other components of equity during this period.

Financial leverage

Both reported and adjusted financial leverage ratios show a general increasing trend throughout the period. Reported leverage ratio remains relatively stable around 1.46-1.49 between 2017 and 2019 but rises to 1.68 in 2020 and further to 1.92 in 2021. Adjusted leverage ratios display a similar trajectory but are consistently higher, escalating from 1.61 in 2017 to 2.12 in 2021. The increasing leverage ratios suggest a growing reliance on debt or other liabilities relative to equity, potentially indicating higher financial risk.

Overall insights

The company has demonstrated asset growth over the five years while experiencing a decline in equity post-2019, which has contributed to increased financial leverage. The higher leverage ratios on a goodwill-adjusted basis compared to reported figures emphasize the impact of intangible assets on the capital structure assessment. These trends point to an expansion strategy potentially financed through increased liabilities, with evolving equity dynamics that may warrant further investigation into the components influencing equity reduction after 2019.

Stockholders’ Equity Trends

The reported stockholders’ equity demonstrated a general upward trend from 2017 through 2019, increasing from approximately $5.05 billion to $8.70 billion. However, this trend reversed starting in 2020, with decreases in both 2020 and 2021, bringing the equity down to about $7.31 billion by the end of 2021.

The adjusted stockholders’ equity, which presumably removes the impact of goodwill, follows a similar pattern but with consistently lower values compared to the reported figures. It rose steadily from about $3.86 billion in 2017 to $7.45 billion in 2019 before declining to roughly $6.01 billion by the end of 2021.

Return on Equity (ROE) Analysis

Reported ROE exhibited significant volatility during the period. It was slightly negative at -2.14% in 2017, turned strongly positive in 2018 and 2019 reaching 17.71% and 16.84% respectively, and then sharply declined back to negative territory in 2020 and 2021, with -14.25% and -3.03% respectively.

The adjusted ROE, which likely considers equity net of goodwill adjustments, mirrored the reported ROE's volatility but showed more pronounced fluctuations. It started at -2.8% in 2017, peaked higher than reported ROE in 2018 and 2019 at 21.61% and 19.68%, respectively, and dropped more sharply in 2020 and 2021 to -17.06% and -3.69%, indicating overall weaker profitability when adjusted for goodwill.

Summary of Financial Performance Patterns

The data indicates a period of growth in equity and profitability from 2017 through 2019, followed by a contraction phase starting in 2020. The decline in both reported and adjusted equity suggests either asset write-downs, losses, or both in the latter years. The negative ROE values in 2020 and 2021 confirm operating performance challenges during those years.

The adjustments for goodwill consistently reduce equity and amplify the volatility in ROE, implying that goodwill represented a significant component of equity and had a substantial impact on profitability metrics. The decline in adjusted equity and ROE in the later years highlights potential impairments or diminished earnings power unrelated to goodwill-held assets.

Total Assets

The total assets on a reported basis increased steadily each year, starting from approximately $7.4 billion in 2017 and rising to about $14.1 billion in 2021. This reflects a consistent growth trend in the company’s asset base over the five-year period.

When adjusted for goodwill, total assets show a similar increasing pattern but at lower absolute values. The adjusted assets grew from around $6.2 billion in 2017 to roughly $12.8 billion in 2021. This indicates that goodwill had a significant impact on the total assets reported, and adjusting for it provides a more conservative view of the asset growth.

Return on Assets (ROA)

The reported ROA experienced considerable fluctuations during the period. Initially, the company reported a negative ROA of -1.46% in 2017, followed by strong positive performance with ROAs of 11.86% in 2018 and 11.54% in 2019. However, the ROA turned sharply negative again in 2020 at -8.49%, improving slightly to -1.57% in 2021 but remaining below the positive results seen in 2018 and 2019.

The adjusted ROA, which accounts for the removal of goodwill, mirrors the reported ROA trend but shows slightly more pronounced negative values in 2017 and 2020, and similarly high positive values in 2018 and 2019. The adjusted ROA was -1.74% in 2017, peaked at 13.49% in 2018, then declined to 12.8% in 2019. It plummeted to -9.41% in 2020 and modestly recovered to -1.74% in 2021.

Overall Insights

The company displayed robust asset growth over the five years, whether measured on a reported or a goodwill-adjusted basis. However, profitability as measured by ROA was volatile, with a strong positive performance in the middle years (2018 and 2019) followed by negative returns in 2020 and 2021. The declines in ROA coincide with the period of global disruptions beginning in 2020, possibly impacting operational efficiency or net income generation.

Adjusting ROA for goodwill results in slightly more conservative estimates of asset profitability but does not alter the overall trend direction. The data suggests that while the company expanded its asset base significantly, it faced challenges in generating consistent positive returns on these assets in the latter part of the period.