Twitter Inc. (NYSE:TWTR)

The financial data reveals significant fluctuations in profitability and earnings measures over the five-year period. The company experienced a net loss in 2017, followed by substantial net income in both 2018 and 2019, before returning to losses in 2020 and 2021, although the losses in 2021 were less severe than those in 2020. This indicates a peak in profitability during the middle years, with a decline thereafter.

Earnings before tax (EBT) follow a similar pattern, showing a loss in 2017, sizeable positive earnings in 2018 and 2019, and a return to losses in the subsequent two years. The amplitude of the earnings fluctuated somewhat, with the two years of profitability being relatively comparable, and losses deepening notably in 2021.

Looking at earnings before interest and tax (EBIT), the pattern is again consistent with a transition from negative or very low earnings in 2017 to strong positive earnings in 2018 and 2019. However, EBIT sharply decreased in 2020, turning negative in 2021, which suggests reduced operational profitability and possibly higher operating expenses or other operational challenges in these later years.

The trend in earnings before interest, tax, depreciation, and amortization (EBITDA) is somewhat less volatile, showing a large increase from 2017 to 2018, with 2019 maintaining a similar level. After this, there is a pronounced decline in 2020 and a further decrease in 2021. This indicates that while cash operating performance remained robust during the mid-period, there was a significant reduction in operational cash flow generation capability during the last two years.

Overall, the company's financial performance shows a marked improvement through 2018 and 2019, followed by a downturn starting in 2020 that continues into 2021. This pattern may reflect changing market conditions, strategic shifts, or increased costs impacting profitability and operational cash flow.

Enterprise Value (EV)

The enterprise value exhibited a fluctuating pattern over the five-year period. It decreased from approximately $21.9 billion at the end of 2017 to about $20.1 billion at the end of 2018. Subsequently, it increased significantly to around $26.2 billion by the end of 2019. A notable surge occurred in 2020, with the value reaching approximately $53.3 billion, followed by a sharp decline to about $26.9 billion by the end of 2021.

Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)

EBITDA demonstrated considerable variability over the analyzed period. Starting at roughly $406 million in 2017, the value more than doubled to nearly $982 million in 2018, and then slightly increased to approximately $994 million in 2019. However, EBITDA declined substantially to around $597 million in 2020 and further decreased to approximately $185 million in 2021.

EV/EBITDA Ratio

The EV/EBITDA ratio presented a volatile and increasing trend throughout the timeframe. It dropped significantly from 54.02 in 2017 to 20.47 in 2018, but then increased to 26.38 in 2019. The ratio sharply escalated to 89.29 in 2020, and surged further to an elevated level of 145.33 in 2021. This rise in the ratio was primarily driven by the declining EBITDA in relation to fluctuating enterprise value.

Summary

The data reveals that the company experienced fluctuations in enterprise value with a peak in 2020, followed by a reduction in 2021. EBITDA peaked in 2019 before entering a notable decline over the next two years. The EV/EBITDA ratio reflects these dynamics, showing a general increase after 2018, indicating a growing disparity between enterprise value and EBITDA, suggestive of diminishing earnings relative to the company’s valuation.