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CNBC Transcript: CNBC Exclusive: Twitter CEO Dick Costolo Speaks with Julia Boorstin on CNBC's "Closing Bell" Today, Monday, October 27

WHEN: Today, Monday, October 27th

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=3000325161 and http://video.cnbc.com/gallery/?video=3000325186.

All references must be sourced to CNBC.

JULIA BOORSTIN: TWITTER REVENUE COMING IN AT $361 MILLION. NOW THAT IS UP 114% YEAR OVER YEAR, THAT IS ABOUT $10 MILLION MORE THAN WALL STREET HAD PROJECTED. EARNINGS PER SHARE COMING IN RIGHT IN LINE WITH EXPECTATIONS AT ONE CENT PER SHARE. NOW THE KEY NUMBER TO WATCH FOR TWITTER IS ALWAYS THAT MONTHLY ACTIVE USER NUMBER. THAT NUMBER COMING IN AT 284 MILLION MONTHLY ACTIVE USERS. PRETTY MUCH RIGHT IN LINE. NOW, LOOKING AT ADVERTISING AVERAGE REVENUE PER USER, THAT NUMBER COMING IN AT $1.12. THAT'S ONE CENT BETTER THAN EXPECTED. AND THEN LOOKING ON TO FOURTH QUARTER PROJECTIONS, THE COMPANY'S Q4 PROJECTIONS OF BETWEEN $440 AND $450 MILLION FOR THE QUARTER ARE A LITTLE BIT LIGHTER THAN WALL STREET PROJECTIONS OF ABOUT $448 MILLION. SO THAT MIDPOINT IS A LITTLE BIT LIGHTER THAN EXPECTED, BUT EVERYTHING PRETTY MUCH IN LINE WITH THE EXCEPTION OF REVENUE WHICH IS BETTER THAN EXPECTED. RIGHT NOW, I'D LIKE TO BRING IN TWITTER CEO DICK COSTOLO TO TALK ABOUT THESE NUMBERS. DICK, THANKS SO MUCH FOR TALKING TO US TODAY.

DICK COSTOLO: JULIA, THANKS AGAIN FOR COMING. IT IS WONDERFUL TO HAVE YOU HERE IN OUR LOVELY HOME.

BOORSTIN: IN YOUR LOVELY OFFICES. SO TELL ME A LITTLE BIT ABOUT WHAT DROVE THE RESULTS THIS QUARTER. REVENUE A LITTLE BIT BETTER THAN EXPECTED, BUT THEN YOU ARE PROJECTING Q4 NUMBERS TO BE LIGHTER?

COSTOLO: WELL, OUR Q4 NUMBERS, LET ME JUST BE SPECIFIC, ARE ACTUALLY A RAISE ON THE FULL-YEAR FOR US AND A RAISE ON THE QUARTER. AND I WOULD ALSO SAY ABOUT OUR BUSINESS SPECIFICALLY THAT ACROSS THE LANDSCAPE OF $1 BILLION DIGITAL ADVERTISING BUSINESSES, WE ARE THE FASTEST GROWING BUSINESS WITHIN THAT LANDSCAPE.

BOORSTIN: TELL ME A LITTLE BIT ABOUT YOUR USER GROWTH. YOU HAVE TALKED A LITTLE BIT ABOUT IT IN THE PAST ABOUT HOW YOU NEED TO ADD A SIGNIFICANT NUMBER OF USERS TO THE MAINSTREAM. 13 MILLION NEW USERS IN THIS QUARTER. IT IS IN LINE WITH ESTIMATES, BUT STILL NOT A DRAMATIC JUMP.

COSTOLO: WE HAVE AN ASPIRATIONAL GOAL TO BUILD THE LARGEST DAILY AUDIENCE IN THE WORLD. AND THAT AUDIENCE IS COMPRISED OF WHAT I WOULD CALL THREE GEOMETRICALLY ECCENTRIC CIRCLES. AT THE CORE, YOU HAVE THOSE 284 MILLION MONTHLY ACTIVE USERS WHO CREATE ALL THE CONTENT THAT IS USED ACROSS THE REST OF THE ENTIRE SYSTEM. IN THE CIRCLE BEYOND THAT, YOU HAVE THE HUNDREDS OF MILLIONS OF USERS WHO COME TO TWITTER BUT DON'T LOG IN. THOSE LOGGED OUT USERS, AND WE HAVE TALKED ABOUT THE SIZE OF THAT AUDIENCE A LITTLE BIT. AND THEN THIRDLY, YOU HAVE THE CIRCLE BEYOND THAT WHICH IS THE SYNDICATED AUDIENCE. ALL THOSE USERS ACROSS THE WEB THAT CONSUME AND EXPERIENCE TWITTER CONTENT IN SYNDICATION THAT WE HAVE NOW ALSO ADDED TO MOBILE APPLICATION SYNDICATION WITH THE LAUNCH OF OUR MOBILE APP DEVELOPER KIT FABRIC.

BOORSTIN: BUT TELL ME A LITTLE BIT ABOUT YOUR GROWTH AT THE USER BASE. CAN YOU TELL US HOW MANY USERS YOU EXPECT TO ADD IN Q4 AND CAN YOU GIVE US ANY NEWS ABOUT YOUR INTENT TO GROW THIS LOGGED OUT EXPERIENCE? YOU HAVEN'T MADE THAT MANY DRAMATIC CHANGES TO THE PRODUCT WHICH YOU HAVE SAID YOU WOULD MAKE.

COSTOLO: SURE. WELL I WOULD SAY THAT WE HAVE THREE PRIORITIES WITH RESPECT TO THE BUSINESS IN GENERAL AND GROWING THAT LARGEST DAILY AUDIENCE. THEY'RE ONE, OF COURSE, STRENGTHENING THE CORE. GROWING THAT LOGGED IN, MONTHLY ACTIVE USER BASE. THAT IS PRIORITY NUMBER ONE. BEYOND THAT, WHEN I TALK ABOUT REDUCING THE BARRIERS TO CONSUMPTION, AND HELPING THOSE LOGGED OUT USERS GET AN EXPERIENCE AND A CONSUMPTION EXPERIENCE RIGHT AWAY, WE HAVE STARTED TO EXECUTE ON THAT. FOR EXAMPLE, IN THE LAST QUARTER, WE RELEASED OUR MOBILE PROFILES EXPERIENCE. AND THOSE NEW MOBILE PROFILES HAVE DRAMATICALLY INCREASED THE NUMBER OF VIEWS, THE NUMBER OF ENGAGEMENTS AND THE NUMBER OF SPECIFICALLY OF MEDIA CONTENT VIEWS ON THOSE PROFILE EXPERIENCES. SO WE LIKE A LOT THE STRATEGY WE HAVE GOT TO GROW THAT LOGGED OUT AUDIENCE. OUR FIRST BIT OF WORK AROUND THE LOGGED OUT AUDIENCE THAT COMES TO PROFILES HAS BEEN TREMENDOUSLY SUCCESSFUL AND WE'LL CONTINUE TO EXECUTE ON THAT ACROSS THE REST OF THE LOGGED OUT AUDIENCE.

BOORSTIN: SO CAN YOU TELL US EXACTLY HOW MUCH GROWTH YOU'RE SEEING OF THAT LOGGED OUT AUDIENCE AND HOW THAT TRANSLATES TO REVENUE GROWTH?

COSTOLO: WELL, WE'LL TALK ABOUT SOME OF THE LOGGED OUT NUMBERS AROUND PROFILE PAGES ON THE CALL LATER ON TODAY.

BOORSTIN: HOW PROBLEMIC IS IT, THOUGH, THAT YOU HAVE LESS INFORMATION ABOUT THE LOGGED OUT USERS SO THEY ARE LESS VALUABLE TO ADVERTISERS?

COSTOLO: WE DON'T THINK THAT THEY ARE LESS VALUABLE TO ADVERTISERS FOR A NUMBER OF REASONS. THOSE USERS WHO COME TO TWITTER ON A LOGGED OUT BASIS ARE COMING EITHER BECAUSE OF A DIRECTED SEARCH, THEY ARE SEARCHING FOR AN INTEREST, A HASH TAG OR A USER. SO THEY'RE ALREADY COMING INTO THE PLATFORM WITH INTEREST. AND SECONDLY, BECAUSE OF OUR ABILITY TO ORGANIZE CONTENT AROUND THOSE INTERESTS DURING THE WORLD CUP, WITH THE KIND OF WORLD CUP EXPERIENCE WE DEVELOPED, WE KNOW THAT WE CAN DEPLOY EXPERIENCES THAT ARE SUPER VALUABLE AND ENGAGING TO THAT LOGGED OUT AUDIENCE NO MATTER HOW THEY COME TO THE PLATFORM.

BOORSTIN: WILL THAT LOGGED OUT AUDIENCE EVER BE AS VALUABLE, THOUGH, AS A LOGGED IN USER?

COSTOLO: WE THINK THEY CAN BE – WE THINK THAT THEIR CONSUMPTION FIRST AUDIENCE LOGGED IN OR OUT CAN BE JUST AS VALUABLE.

BOORSTIN: NOW TELL ME A LITTLE BIT ABOUT YOUR AVERAGE REVENUE PER USER. YOU GREW IT THIS QUARTER AND IT IS UP TO $1.12, BUT IT IS STILL ABOUT HALF OF FACEBOOK'S AVERAGE ADVERTISING REVENUE PER USER. HOW CAN YOU CATCH UP?

COSTOLO: WELL, WE BELIEVE THAT THE INTEREST GRAPH THAT'S MEASURED BY WHAT PEOPLE ARE COMING TO TWITTER TO CONSUME AND THE KINDS OF THINGS THEY ARE ENGAGING WITH GIVE A VERY SPECIFIC VIEW OF WHAT THAT USER IS INTERESTED IN AND THAT IS A HIGHLY TARGETIBLE AND ADVERTISER FRIENDLY VIEW AND WE LIKE THE WAY THAT'S GROWING. WE LIKE THE TRAJECTORY IT HAS BEEN GROWING ON AND WE LOVE THE ENGAGEMENT RATES WE ARE GETTING WITH OUR ADS.

BOORSTIN: BOTTOM LINE, THOUGH, WILL YOUR AVERAGE ADVERTISING REVENUE PER USER BE ABLE TO CATCH UP TO FACEBOOK?

COSTOLO: WELL, I'M NOT GOING TO SPECULATE ON WHETHER IT IS GOING TO CATCH UP TO OR PASS OR FALL SHORT OF SOMEBODY ELSE'S.

BOORSTIN: OK, SO LET'S TALK ABOUT FABRIC, WHICH YOU ANNOUNCED LAST WEEK. IT IS A NEW, SORT OF, OPERATING SYSTEM FOR MOBILE APP DEVELOPERS. IS THIS A BIG DEPARTURE FOR TWITTER? WHAT DO INVESTORS NOT UNDERSTAND ABOUT THIS ANNOUNCEMENT?

COSTOLO: WELL, I WOULD SAY TWO THINGS ABOUT FABRIC. FABRIC IS ABOUT BOTH THE EVOLUTION OF TWITTER FROM A SINGLE PRODUCT COMPANY TO A PLATFORM BUSINESS. AND SECONDLY, AND SPECIFICALLY TO FABRIC, FABRIC IS ABOUT BEING PART OF THE FOUNDATION OF THE ENTIRE MOBILE APPLICATION ECOSYSTEM. HELPING DEVELOPERS AROUND THE WORLD BUILD APPS ACROSS PLATFORMS FROM THE MOMENT THEY START DEVELOPING THEM TO THE DAY THEY WANT TO START MONETIZING THEM AT SCALE. IF WE ARE PART OF THE FOUNDATION OF EVERY MOBILE APPLICATION IN THE WORLD, THEN ENORMOUS OPPORTUNITIES WILL ACCRUE TO US.

BOORSTIN: BUT DOES THIS MEAN A HUGE TRANSFORMATION OF YOUR BUSINESS MODEL?

COSTOLO: NO. IT IS AN EVOLUTION OF THE COMPANY FROM A SINGLE PRODUCT COMPANY TO A PLATFORM BUSINESS AND WE LIKE THAT EVOLUTION.

BOORSTIN: A QUICK QUESTION, A FINAL QUESTION. I KNOW YOU ARE OUT OF TIME HERE, BUT IS ABOUT YOUR MANAGEMENT OF PEOPLE. YOU RECENTLY LOST SOME MORE HIGH PROFILE EXECUTIVES. PETER THIEL RECENTLY CRITICIZED TWITTER AS A HORRIBLY MISMANAGED COMPANY SAYING THERE'S PROBABLY A LOT OF POT SMOKING GOING ON THERE. KIND OF A NASTY CRITICISM OF TWITTER. HOW DO YOU RESPOND TO THESE QUESTIONS THAT INVESTORS HAVE AND THE CRITICISM THAT THIEL MADE?

COSTOLO: YOU KNOW, WHAT I LACK IN HAIR AND 20/20 VISION I MORE THAN MAKE UP FOR IN SELF CONFIDENCE. AND I WILL TELL YOU THAT THE TEAM THAT I HAVE IN PLACE AND THE STRATEGY THAT WE HAVE, WE LOVE. AND WE ALL BELIEVE IN IT. AND WE KNOW THAT WHEN WE'RE SUCCESSFUL, TWITTER WILL BE USEFUL AND VITAL TO EVERY PERSON ON THE PLANET.

BOORSTIN: WOW. QUITE A BOLD STATEMENT THERE. WE LOOK FORWARD TO HEARING MORE ABOUT THOSE LOGGED OUT USERS ON THE UPCOMING EARNINGS CALL. THANKS SO MUCH FOR JOINING US BEFORE THE EARNINGS CALL.

COSTOLO: THANKS.

BOORSTIN: DICK COSTOLO, REALLY APPRECIATE IT.

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