Don’t believe the hype. Twitter did not make money in Q2. The “earnings” they reported were non-GAAP, which translates to Making Sh*t Up, ignoring the bad bits, and paying no attention to accounting standards. This is what passes for corporate accounting today. “Analysts” expected Twitter non-GAAP earnings to be -0.02. Instead, Twitter just blasted through and reported a whopping 0.02 per share, which translates to a nosebleed P/E of 2347 at the current stock price. However non-GAAP numbers are garbage as they simply ignore anything inconvenient.
I do apologize for mentioning outmoded concepts such as Generally Accepted Accounting Standards and actual profits being useful in judging a stock. It’s so much easier to sprinkle pixie dust on the financials instead.
The other side of the coin? Twitter’s GAAP net loss totaled $145 million, up from $42 million a year ago. On a GAAP basis, Twitter lost $0.24 per share. Investors, however, were not expecting Twitter to be profitable by GAAP measurements, so the loss isn’t too much of a drag.
I’ll say it again. Non-GAAP measurements are fictitious and rubbish, and symptomatic of a corrupted financial system that bares little resemblance to reality.