Bad finance: Mind the non-GAAP @Twitter

Richard Beales
The Twitter logo is seen on coffee mugs inside the company's headquarters in San Francisco.
David Paul Morris | Bloomberg | Getty Images

Twitter lost $521 million in 2015. No, wait – it earned $277 million of profit.

The first figure is according to U.S. generally accepted accounting principles, or GAAP. The second is the alternative version created by the company led by Jack Dorsey, ostensibly to make the business easier to understand.

The micro-blogging service is a big user of non-standard metrics. It even forecasts a non-GAAP share count. After $2.2 billion of revenue for 2015, the first thing mentioned in Wednesday's earnings dispatch was more than $550 million of "adjusted EBITDA."

In this, just as in Twitter's non-GAAP profit measure, the biggest adjustment is the exclusion of $682 million of stock-based compensation expense, a whopping 7 percent of its market value.

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