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CNBC Transcript: CNBC Exclusive: Twitter CEO Dick Costolo Speaks with Julia Boorstin on CNBC's "Closing Bell" Today, Tuesday, July 29th

WHEN: Today, Tuesday, July 29th

WHERE: CNBC's "Closing Bell"

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Twitter CEO Dick Costolo on CNBC's "Closing Bell" today. Following are links to the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000296880, http://video.cnbc.com/gallery/?video=3000296914 and http://video.cnbc.com/gallery/?video=3000296913.

All references must be sourced to CNBC.

KELLY EVANS: WE HAVE GOT TWITTER'S QUARTERLY RESULTS OUT. JULIA BOORSTIN JOINS US NOW WITH THE NUMBERS. JULIA?

JULIA BOORSTIN: THAT'S RIGHT, KELLY. TWITTER BEATING AT BOTH THE TOP AND BOTTOM LINE WITH AVERAGE MONTHLY USERS OF 271 MILLION. EXPECTATIONS WERE 267 MILLION. NOW, REVENUE CAME IN AT 312 MILLION VERSUS EXPECTATIONS OF 283 MILLION. AND NON-GAAP ADJUSTED EARNINGS PER SHARE, IT WAS 2 CENTS PER SHARE. IT WAS EXPECTED TO BE A LOSS OF A PENNY PER SHARE. SO, THAT'S 3 CENTS BETTER THAN EXPECTED. NOW, GOING THROUGH THE VARIOUS METRICS HERE, KELLY, THAT LOOK AT TWITTER'S PROFITABILITY, ADVERTISING REVENUE PER USER CAME IN AT $1.02. IT WAS EXPECTED TO BE 96 CENTS. SO, THAT'S BETTER THAN EXPECTED. ALSO MAKING GAINS. THERE'S BEEN A LOT OF COMPARISONS TO FACEBOOK THERE. SO, MAKING GAINS THERE. THEN THERE'S ANOTHER METRIC HERE, AD REVENUE PER 1,000 TIMELINE VIEWS. THAT CAME IN AT $1.60. IT WAS EXPECTED TO BE JUST $1.49. JOINING US NOW TO TALK ABOUT THESE BETTER-THAN-EXPECTED NUMBERS, TWITTER CEO DICK COSTOLO. DICK, THANK YOU SO MUCH FOR JOINING US TODAY.

DICK COSTOLO: SURE.

BOORSTIN: NOW, SURPRISE ON THE TOP AND BOTTOM LINE. WHAT DROVE REVENUE GROWTH HIGHER THAN EXPECTED?

COSTOLO: WE HAD A GREAT QUARTER ACROSS THE BOARD, I'D SAY. REVENUE UP 124%. THAT'S GREAT ACCELERATION YEAR OVER YEAR FOR US AGAIN, OUR FOURTH QUARTER OF REVENUE ACCELERATION. THE MONTHLY ACTIVE USERS, AS YOU MENTIONED, UP TO 271 MILLION. THAT WAS A NET ADD OF 16 MILLION NEW USERS FOR US. THE HIGHEST NUMBER OF ABSOLUTE NET ADS IN THE QUARTER. SO, I THINK IT WAS THE HIGHEST NUMBER OF NET ADS IN FIVE QUARTERS, RATHER. SO, I THINK IT WAS A COMBINATION OF THINGS ACROSS THE COMPANY THAT HAVE REALLY COME TOGETHER FOR US AND I'M VERY, VERY HAPPY ABOUT THAT.

BOORSTIN: IN TERMS OF THAT USER GROWTH, HOW MUCH OF THAT IS THANKS TO THE WORLD CUP? AND WILL YOU BE ABLE TO HOLD ON TO THOSE USERS, OR WILL THEY DROP TWITTER ONCE THERE'S NO MORE SOCCER TO TALK ABOUT?

COSTOLO: SO, I THINK FANTASTICALLY, IT'S GENERALLY BEEN THE CASE THAT IT'S PRODUCT CHANGES THAT HAVE DRIVEN NEW USER GROWTH AND THESE LIVE EVENTS THAT DRIVE MORE ENGAGEMENT FROM OUR ACTIVE USERS. SO, IT WAS OVER THE COURSE OF THE QUARTER PRODUCT CHANGES THAT WE'VE MADE AND THAT WE'VE TALKED ABOUT THAT HAVE DRIVEN THE GROWTH, NOT THE EVENT ITSELF.

BOORSTIN: SO, HOW MANY NEW USERS WERE ADDED BEFORE THE WORLD CUP? CAN YOU TELL US, LIKE, HOW MUCH OF THAT WAS JUST A TOTAL REDUCTION OF CHURN RATHER THAN JUST THIS BIG WORLD EVENT?

COSTOLO: SURE. I WOULD SAY THAT IT WAS A CONTINUOUS SET OF GROWTH ACROSS THE QUARTER. IT WAS NO ONE MOMENT OR ONE-TIME THING THAT AFFECTED THE GROWTH IN USERS. IT WAS THE COMBINATION OF PRODUCT CHANGES THAT WE'VE TALKED ABOUT OVER THE COURSE OF THE YEAR THAT ARE STARTING TO DELIVER THE KIND OF RESULTS WE WANTED TO SEE. AND AS I MENTIONED, THE WORLD CUP DREW ENGAGEMENT, MORE ENGAGEMENT FROM OUR EXISTING USERS, AND IT WAS THE PRODUCT CHANGES THAT DROVE GROWTH.

BOORSTIN: IN TERMS OF THE REVENUE INCREASE, I KNOW YOU RECENTLY LAUNCHED APP INSTALL ADS. HOW MUCH ARE THEY TO THANK FOR THIS INCREASE IN REVENUE?

COSTOLO: WELL, I DON'T WANT TO STEAL MY OWN THUNDER ON THE EARNINGS CALL THAT'S COMING UP --

BOORSTIN: PLEASE, STEAL YOUR THUNDER.

COSTOLO: ALTHOUGH IF ANYONE WAS GOING TO STEAL THEIR OWN THUNDER, I AM A LIKELY CANDIDATE FOR IT. SO, WE WILL TALK ABOUT THAT MORE IN A BIT. BUT OBVIOUSLY, I'M DELIGHTED WITH THE INCREASE AND THE ACCELERATION IN REVENUE, EVEN ADVERTISING REVENUE UP 129%. ACCELERATION THERE AS WELL, SO THAT'S ALL FANTASTIC.

BOORSTIN: KELLY, YOU WANT TO JUMP IN HERE?

EVANS: DICK COSTOLO, JULIA, THANK YOU. IT'S GREAT TO SEE YOU. CAN YOU TALK ABOUT WHETHER YOU THINK OR WHAT YOUR REVENUE PROJECTION OR PLANS ARE NOW AS WE HEAD INTO 2015? I MEAN, HOW FAST AND HOW SUSTAINABLE IS YOUR REVENUE GROWTH?

COSTOLO: WELL, ANTHONY NOTO, WHO'S JUST JOINED THE COMPANY, WILL BE TALKING MORE ABOUT GUIDANCE GOING FORWARD ON THE CALL COMING UP.

BOORSTIN: BUT YOU DID RAISE YOUR GUIDANCE HERE. YOUR 2014 TOTAL REVENUE GUIDANCE IS UP TO 1.3 TO 1.33 BILLION. THE PRIOR GUIDANCE YOU HAD GIVEN WAS JUST 1.2 TO 1.25. WHAT EXPLAINS THAT DIFFERENTIAL AND THE RAISED GUIDANCE?

COSTOLO: I THINK THE DIFFERENTIAL YOU ARE SEEING IN THE RAISED GUIDANCE IS DUE TO THE SUCCESS THAT WE'VE HAD OVER THE COURSE OF THE BEGINNING OF THE YEAR AND OUR VIEW AS TO HOW THAT SUCCESS WILL TRANSLATE INTO THE BACK HALF OF THE YEAR. IT'S PRETTY STRAIGHT FORWARD.

BOORSTIN: KELLY?

EVANS: CAN WE TALK FOR A SECOND JUST ABOUT PRIVACY, DICK? SOME OF THE QUESTIONS COMING IN FROM FOLKS ABOUT TWITTER HAVE A LOT TO DO WITH, YOU KNOW, THE SECURITY OF THEIR ACCOUNTS. AND THIS, AS YOU KNOW, IS A HUGE ISSUE IN THE U.S. AND ALSO INTERNATIONALLY, ALMOST THE MORE SUCCESSFUL TWITTER IS, THE MORE PEOPLE ARE LOOKING TO INTERFERE WITH IT.

COSTOLO: SURE. WELL, WE'VE IMPLEMENTED A BUNCH OF PRIVACY AND SECURITY TECHNIQUES FOR OUR USERS AND TO PROTECT OUR USERS, LIKE TWO FACTOR AUTHENTICATION. WE'VE IMPLEMENTED A VERY NOVEL AND COMPELLING APPROACH, THE TWO FACTOR AUTHENTICATION THAT MEANS YOU HAVE TO HAVE MORE THAN JUST A PASSWORD TO GET INTO YOUR ACCOUNT, TO BOIL THAT DOWN. WE TAKE THAT VERY SERIOUSLY. WE HAVE A WHOLE PRODUCT TEAM FOCUSED ON USER SAFETY AND PRIVACY AND WE'LL CONTINUE TO INVEST IN THAT AS WE BECOME INCREASINGLY THE WORLD'S INFORMATION NETWORK. OBVIOUSLY, IT'S THE CASE THAT WE NEED TO TAKE THAT SERIOUSLY AND ADDRESS IT.

EVANS: DO YOU VIEW FACEBOOK AS A COMPETITOR, DICK?

COSTOLO: I'LL TELL YOU HOW I THINK ABOUT THE LANDSCAPE. WE HAVE A VERY CLEAR SET OF GOALS THAT WE ARE LOOKING TO ACHIEVE, AND THEY'RE ALL BASED ON THE CORE CHARACTERISTICS THAT MAKE TWITTER THE WORLD'S REALTIME INFORMATION NETWORK. THAT WE'RE PUBLIC, THAT WE'RE REALTIME, THAT WE'RE CONVERSATIONAL AND THAT WE'RE WIDELY DISTRIBUTED. WE'RE GOING TO INVEST IN THOSE CHARACTERISTICS IN SERVICE TO OUR GOALS, AND THERE WILL BE LOTS OF OTHER COMPANIES THAT ACHIEVE SUCCESS IN THIS SECULAR TREND OF THE MOBILE LANDSCAPE, AND THAT'S GREAT.

BOORSTIN: BUT NOW, YOUR MONTHLY AVERAGE USERS, 271 MILLION, IT'S JUST A FRACTION OF THE 1.3 BILLION THAT FACEBOOK HAS. YOUR AVERAGE REVENUE PER USER IS STARTING TO MAKE GAINS ON FACEBOOK. YOU HAVE $1.02. FACEBOOK THIS PAST QUARTER HAD $2.06. YOU'RE ABOUT HALF OF WHAT FACEBOOK HAS. WILL YOU BE ABLE TO HAVE THE SAME AVERAGE REVENUE PER USER -- I'M SORRY, ADVERTISING REVENUE PER USER AS FACEBOOK DOES?

COSTOLO: WE DON'T THINK THERE'S ANYTHING PREVENTING US – ANYTHING STRUCTURAL FROM PREVENTING US FROM HAVING THE KINDS OF FINANCIAL RESULTS YOU SEE FROM OTHER PLAYERS IN THE SPACE.

BOORSTIN: DO YOU THINK YOU'LL BE ABLE TO HAVE THE SAME SIZE AUDIENCE AS FACEBOOK DOES?

COSTOLO: OUR GOAL IS TO HAVE THE LARGEST TOTAL AUDIENCE IN THE WORLD AND REACH EVERY PERSON ON THE PLANET. THAT'S OUR GOAL, NOTHING LESS THAN THAT.

BOORSTIN: NOW, YOU DID ADD MORE THAN EXPECTED USERS THIS PAST QUARTER. YOU STILL ONLY HAVE 271 MILLION. THAT'S UP FROM 255 MILLION A QUARTER AGO. SO, YOU'RE GROWING, BUT IT'S NOT GROWING THAT FAST. HOW CAN YOU ACCELERATE TWITTER'S USER GROWTH? WHAT ARE YOU DOING TO MAKE THAT LEAP?

COSTOLO: WE HAVE A VERY CLEAR PRODUCT ROAD MAP THAT WE'VE LAID OUT. WE'RE IMPLEMENTING THAT PRODUCT ROAD MAP. WE'VE ADDED A NUMBER OF PRODUCT EXECUTIVES TO THE COMPANY, DANIEL GRAF, OF COURSE, RUNNING CONSUMER PRODUCT, A BUNCH OF OTHER EXECUTIVES WHO ARE IMPLEMENTING THIS ROAD MAP. I LIKE THE PROGRESS THEY'VE MADE IN SERVICE IMPLEMENTING THAT ROADMAP, AND THAT 16 MILLION NET NEW USER ADS THIS PAST QUARTER IS THE HIGHEST NUMBER WE'VE HAD IN FIVE QUARTERS AND I'M VERY HAPPY WITH THAT.

BOORSTIN: BUT DO YOU NEED IT TO CHANGE WHAT TWITTER IS ALL ABOUT AND MAKE IT MORE OF A CONTENT CONSUMPTION PLATFORM AND LESS IN SERVICE OF THE PEOPLE WHO LIKE TO TWEET? BECAUSE THERE ARE PROBABLY MANY FEWER PEOPLE WHO WANT TO TWEET THAN PEOPLE WHO WANT TO READ TWEETS.

COSTOLO: WHEN YOU THINK ABOUT THE 271 MILLION MONTHLY ACTIVE USERS, THE MAJORITY OF WHOM CREATE CONTENT ON THE PLATFORM, THAT CONTENT IS OBVIOUSLY APPROPRIATE AND APPLICABLE TO A GLOBAL AUDIENCE AND A BROAD AUDIENCE. WE'VE TALKED ABOUT THE REACH AND IMPACT OF TWITTER BEFORE, BOTH IN SYNDICATION OFF OF OUR OWNED AND OPERATED PROPERTIES, AND WE HAVE HUNDREDS OF MILLIONS OF PEOPLE THAT COME TO TWITTER AND DON'T LOG IN THAT COME TO OUR PROPERTIES. SO, THAT AUDIENCE THAT WE HAVE THAT ALREADY CREATES CONTENT IS APPLICABLE TO A MUCH BROADER AUDIENCE AND WE'LL BE TALKING MORE ABOUT THAT ON THE CALL.

BOORSTIN: HOW IMPORTANT IS COMMERCE TO YOUR FUTURE? YOU HAVE THE RAISED GUIDANCE. IS THAT BECAUSE YOU'RE GOING TO BE STARTING TO GENERATE MORE REVENUE FROM COMMERCE?

COSTOLO: AS WE'VE DISCUSSED BEFORE, I THINK THAT THE POSSIBILITY OF IN-THE-MOMENT COMMERCE, NOW COMMERCE, IF YOU WILL, THAT'S AFFORDED BY PLATFORM LIKE TWITTER IS ENORMOUS AND WE'LL CONTINUE TO EXPLORE THE OPPORTUNITIES THERE. I DON'T THINK WE HAVE ANYTHING ELSE TO ADD TO THAT NOW.

BOORSTIN: KELLY?

EVANS: DICK, CAN YOU JUST ADDRESS TO WHAT EXTENT MOBILE APP INSTALL ADS ARE DRIVING YOUR REVENUE GROWTH?

COSTOLO: WELL, WE LIKE THE OPPORTUNITY PRESENTED BY MOBILE APP INSTALL ADS AND I'LL LET ANTHONY AND THE TEAM TALK ABOUT THEIR GUIDANCE FOR THAT ON THE CALL.

BOORSTIN: NOW WE OPENED UP TO -- SORRY, GO AHEAD, KELLY.

EVANS: NO, LOOK, I UNDERSTAND IF YOU WANT TO LEAVE THE NUMBERS TO THE CFO. I'M JUST CURIOUS AS A STRATEGY WHETHER MOBILE APP INSTALL ADS ARE AN IMPORTANT PART OF YOUR REVENUE GROWTH?

COSTOLO: MOBILE APP INSTALL ADS ARE A GREAT OPPORTUNITY. WE'VE OBVIOUSLY HEADED DOWN THAT PATH AND WE LIKE THE SUCCESS WE'VE HAD THERE AND WE'LL CONTINUE TO INVEST IN IT.

BOORSTIN: NOW, WE OPENED UP TO QUESTIONS FROM OUR VIEWERS, ASKED THEM TO TWEET IN, #ASKCOSTOLO, AND WE GOT A HUGE RANGE OF RESPONSES.

COSTOLO: YEAH. I SAW A BUNCH OF THOSE.

BOORSTIN: I'M SURE YOU SAW SOME OF THEM. WE WANT TO GO THROUGH THEM SORT OF RAPID FIRE STYLE. SO GIVE US YOUR FASTEST, QUICKEST ANSWERS. @WINDOWSGUTTERS ASKS, HOW MANY FAKE ACCOUNTS DOES TWITTER HAVE AND BE HONEST?

COSTOLO: I THINK THAT WE ANNOUNCED IN OUR S-1 THAT WE HAVE LESS THAN 5% OF ALL ACCOUNTS AT ANY GIVEN TIME ARE SORT OF FAKE OR SPAM ACCOUNTS. THAT'S A CHALLENGE THAT OBVIOUSLY IS SOMETHING THAT APPLIES TO EVERY PLATFORM IN OUR LANDSCAPE. WE DO A GREAT JOB I THINK OF ERADICATING THOSE THE MOMENT WE FIND THEM, AND IN FACT, I THINK WE'RE GETTING BETTER AND BETTER AT THAT.

BOORSTIN: @OCULARNERVOSA ASKS, WHY IS THERE NO EDIT FEATURE TO FIX TYPOS?

COSTOLO: WELL, THERE'S SOMETHING ABOUT THE PUBLIC NATURE OF THE TWEETS AND BROADCASTING IN REALTIME AND HAVING THAT REALTIME INFORMATION STREAM THAT I THINK IS DELIGHTFUL, AND I'M NOT SURE IF BEING ABLE TO EDIT THEM IN HINDSIGHT IS THE KIND OF PLATFORM WE WANT TO CREATE.

BOORSTIN: YOU DON'T LET PEOPLE FIX THEIR TYPOS. OKAY, HOW DO YOU PLAN TO INCREASE THE USER BASE WITHOUT RUINING WHAT MAKES TWITTER GREAT TO EXISTING USERS? @THECOOLNOODLE ASKS THAT QUESTION.

COSTOLO: SO I THINK THAT IF YOU LOOK AT OUR APPS ON IOS OR ANDROID NOW AND COMPARE THEM TO WHAT THEY LOOKED LIKE A YEAR AGO, YOU WOULD SEE THAT THEY'RE, FRANKLY, EXTRAORDINARILY DIFFERENT. AND YET, WE'VE BEEN ABLE TO MAKE THOSE CHANGES AS A COHESIVE SET OF PRODUCT CHANGES OVER TIME WITHOUT DISTURBING OR DISRUPTING THIS GROWING CORE NOW OVER 271 MILLION MONTHLY ACTIVE USERS, AND I'M PROUD OF THAT.

BOORSTIN: UNFORTUNATELY, I UNDERSTAND WE HAVE TO LET YOU GO AND PREP FOR YOUR CONFERENCE CALL, WHICH STARTS SHORTLY. THANK YOU SO MUCH FOR JOINING US. WE REALLY APPRECIATE IT. DICK COSTOLO, CEO OF TWITTER. KELLY, BACK OVER TO YOU.

COSTOLO: YEAH THANKS VERY MUCH FOR HAVING ME.

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