The explanation is found in the company's 10-Q, not the 8-K. They cite increased headcount (primarily) and stock-based compensation, as well as increased R&D spending to develop new products and increased "consulting and outside professional service costs" as the main reasons for the overall cost increases. Hope this helps.
Though better than last quarter's sequential revenue growth rate of just 4%, GPRO has not been producing the kind of quarter-over-quarter revenue growth that is characteristic of a high growth company -- especially for one that is trading at such lofty valuation levels. Further, compared to the first quarter of 2013, the first quarter of 2014 showed a -7.6% decrease in revenue year-over-year.
Total operating expenses in 2014 jumped over 70% compared to the same period in 2013. This same trend can be seen over the past several years with R&D spending accounting for the biggest cumulative jump in expenses. The company has stated that they expect these expenses to continue in the future as well as GPRO looks to develop new products and services to better compete with the growing competition in the space.
Although MAUs grew 23% YoY, sequential growth quarter-over-quarter (QoQ) slowed in Q3 to 4.8% from Q2's 6.3% growth rate. Further, timeline views grew at the same 4.8% rate QoQ -- but much slower than Q2's 10.2% growth rate QoQ. However, mobile growth continues to expand as 80% of all MAUs are now mobile compared to approximately 78% in Q1 2014 and Q2 2014. Perhaps the most positive point, though, is that advertising revenue per thousand timeline views continued to grow double-digits in Q3. Although a slight decrease QoQ from Q2's 11.1% growth, Q3's 10.6% increase is a positive for the company going forward.
Despite increasing losses in 2014, adjusted EBITDA margin has been improving over the past several quarters from 15% in Q1 to 17% in Q2 to 19% most recently in Q3. This is important to note because EBITDA margin is a good measure of a company's core profitability and allows for easier comparisons of financial performance between firms. However, EBITDA is a non-GAAP measure and as such is not subject to strict guidelines in the calculation of its component parts.
TWTR's Q3 net loss of $175 million is an increase over Q1 and Q2 of this year. In fact, so far in 2014, each quarter has shown an increasing net loss. In Q1, the company reported a net loss of $132 million followed by a Q2 net loss of $145 million followed by Q3's net loss of $175 million.
Revenue slowed YoY in Q3 2014 compared to Q2 2014 (+124% vs. +114%). As revenue continues to increase each quarter, YoY increases will become less as the previous year's revenue number will be bigger than in the past.
While new subscriber growth in Q3 was below expectations, it should be noted that NFLX is subject to seasonality. Historically, domestic member growth is generally greatest in Q4 and Q1. Further, Q2 is usually weakest with Q3 showing some acceleration. The company does expect the international segment to demonstrate similar seasonality, but not until that market becomes more established and there is a longer history to assess that pattern.
After several quarters of diminishing losses, the international streaming segment posted a bigger loss in Q3. While it is likely a one-off event, it is certainly something to watch for going forward as NFLX needs the international segment to post profits to justify its lofty valuation.
These are the earnings numbers that any company would dream of -- let alone a restaurant chain. Margin improvement was largely due to price increases in all markets, but that obviously did not detract from sales as same store sales grew almost 20%, which is astounding. Revenue and earnings growth of 31% and 57%, respectively, is even more impressive than last quarter's 28.6% revenue growth and 25.5% earnings growth.
This is the reason for CMG's -7% fall following earnings. Again, the market overreacted as management was likely being cautious and managing expectations ahead of tougher comparables next year. It will be a lot harder for CMG to continue to grow same store sales by double-digits each year. Given the explosive growth the company experienced this year, these estimates are reasonable. However, I believe same store sales will beat these conservative estimates.
This is very important as Q3's profit was only YELP's second profit ever. So, while revenue might be "slowing" from 60% to 50% YoY, the company is growing their bottom line. That is where the real money is -- literally -- and what will inevitably help send YELP shares higher going forward.
Compare these Q3 numbers with last quarter's numbers which showed "only" 61% YoY net revenue growth and a smaller net profit (of +$2.7 million). Moreover, adjusted EBITDA grew 120% YoY in the second quarter, which was actually slower than Q3's 150% increase YoY. And while average monthly unique visitors and average monthly mobile unique visitors slowed in Q3 from Q2, growth in both quarters was still astounding. In Q2 2014, average monthly unique visitors grew 27% YoY (to approximately 138 million), while average monthly mobile unique visitors grew 51% YoY (to approximately 68 million). Further, cumulative reviews grew 44% YoY in Q2 to roughly 61 million, while active local business accounts grew 55% YoY to 79,900.
This is a major part of the reason for yesterday's nearly -20% plunge. Not only is the revision only $4 million (or less than 4%), but YELP is still expected to still grow 52% YoY in Q4. A company growing at that sort of pace is not likely to maintain it indefinitely. Also, as revenues grow more, comparables will become tougher. As such, I view yesterday's market action as a severe overreaction.
Although TWTR has managed to show impressive year-over-year (YoY) growth in each of the areas listed here, the numbers are far less impressive on a quarter-over-quarter (QoQ) basis. For example, mobile MAUs growth actually slowed to 6.6% QoQ growth from 7.6% QoQ growth, while ad revenue per thousand timeline views actually fell in Q1 2014 compared to Q4 2013. Ultimately, the devil is in the details and the company does continue to lose money on a GAAP-adjusted basis, while also adding to its accumulated deficit (pg. 5).
Q2 14 vs. Q1 14 vs. Q4 13
- MAUs 271 million vs. 255 million vs. 241 million (6.3% vs. 5.8%)
- Mobile MAUs 211 million vs. 198 million vs. 184 million (6.6% vs. 7.6%)
- Timeline views 173b vs. 157b vs. 148b (10.2% vs. 6.1%)
- Advertising revenue per thousand timeline views $1.60 vs. $1.44 vs. $1.49 (11.1% vs. -3.4%)