Top 1Q data points comScore mobile data indicated US monthly active users were up 2% y/y and down 4% q/q (down 3mn q/q)}, versus our estimate for +4% y/y, +1% q/q. Total minutes for 1Q17 (2-mo. data) are tracking down 18% y/y, with mobile down 18% and desktop down 23%. Mobile minutes have averaged a 20% y/y decline for the last 4 months. Estimates vs Consensus Our 1Q17 rev/EPS estimates for $535mn/S0.03 are slightly above the Street and above the implied midpoint of management’s guidance (based on EBITDA and EBITDA margin outlook}. Despite our near-term concerns, we believe the outlook was sufficiently conservative. That said, we see risk to current consensus estimates for the year, and we are below Street revenue at $2.3bn for 2017 vs consensus at $2.35bn, though slightly ahead on EBITDA on more moderate cost assumptions. Our 2017 estimates assume a conservative 4% MAU growth for the year. Table 29: Twitter Estimate Summary 1017 2017 2017 2018 Revenue BofA ML est. $535 $544 $2,301 $2,339 Growth Y/Y% -10% -10% -9% 2% Street $510 $548 $2,352 $2,496 BofA ML vs Street Above Below Below Below EBITDA BofA ML est. $120 $152 $639 $689 Street $94 $135 $564 $650 BofA ML vs Street Above Above Above Above EPS BofA ML est. $0.03 $0.08 $0.33 $0.34 Street $0.01 $0.06 $0.27 $0.37 BofA ML vs Street Above Above Above Below Source: BofA Merrill Lynch Global Research, Bloomberg, as of 4/4/2017 Our $14.50 price objective is based on 12x our 2018 EBITDA estimate, which reflects a discount to the online media group (13x). We believe the Twitter platform has slowing user and revenue growth and as such, we expect the stock to trade at a sustained discount to online media peers, with potential M&A adding some offsetting downside support. 44 Internet/e-Commerce | 06 April 2017 i rooriuliall HOUSE_OVERSIGHT_014930