Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES x NO ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES x NO ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definition of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ¨ NO x

The number of shares of the registrant’s common stock outstanding as of July 31, 2014 was 615,232,482.

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q.

You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or will occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

We review a number of metrics, including monthly active users, or MAUs, timeline views, timeline views per MAU and advertising revenue per timeline view, to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions. See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Metrics” for a discussion of how we calculate MAUs, timeline views, timeline views per MAU and advertising revenue per timeline view.

The numbers of active users and timeline views presented in this Quarterly Report on Form 10-Q are based on internal company data. While these numbers are based on what we believe to be reasonable estimates for the applicable period of measurement, there are inherent challenges in measuring usage and user engagement across our large user base around the world. For example, there are a number of false or spam accounts in existence on our platform. We have performed an internal review of a sample of accounts and estimate that false or spam accounts represented less than 5% of our MAUs. In making this determination, we applied significant judgment, so our estimation of false or spam accounts may not accurately represent the actual number of such accounts, and the actual number of false or spam accounts could be higher than we have estimated. We are continually seeking to improve our ability to estimate the total number of spam accounts and eliminate them from the calculation of our active users. For example, we made an improvement in our spam detection capabilities in the second quarter of 2013 and suspended a large number of accounts. Spam accounts that we have identified are not included in the active user numbers presented in this Quarterly Report on Form 10-Q. We treat multiple accounts held by a single person or organization as multiple users for purposes of calculating our active users because we permit people and organizations to have more than one account. Additionally, some accounts used by organizations are used by many people within the organization. As such, the calculations of our active users may not accurately reflect the actual number of people or organizations using our platform.

Our metrics are also affected by third-party applications that automatically contact our servers for regular updates with no user action involved, and this activity can cause our system to count the users associated with such applications as active users on the day or days such contact occurs. Historically we tracked and reported in this section all users who accessed Twitter through third-party applications. We have reviewed and refined our processes, however, to calculate a new metric that is comprised of only such active users who have used applications with the capability to automatically contact our servers for regular updates where there was no discernable user action involved. In the three months ended June 30, 2014, approximately 11% of all active users solely used third-party applications to access Twitter. However, only up to approximately 8.5% of all active users used third party applications that may have automatically contacted our servers for regular updates without any discernable additional user-initiated action. The calculations of MAUs presented in this Quarterly Report on Form 10-Q may be affected as a result of automated activity.

In addition, our data regarding user geographic location for purposes of reporting the geographic location of our MAUs is based on the IP address associated with the account when a user initially registered the account on Twitter. The IP address may not always accurately reflect a user’s actual location at the time such user engaged with our platform.

We present and discuss timeline views in this Quarterly Report on Form 10-Q. We have estimated a small percentage of timeline views in the three months ended September 30, 2013 to account for certain timeline views that were logged incorrectly during the quarter as a result of a product update. We believe this estimate to be reasonable, but the actual numbers could differ from our estimate. Further, timeline views in 2012 exclude an immaterial number of timeline views for our mobile applications, certain of which were not fully tracked until June 2012. We present and discuss our total audience based on both internal metrics and data from Google Analytics, which measures unique visitors to our properties.

We regularly review and may adjust our processes for calculating our internal metrics to improve their accuracy. Our measures of user growth and user engagement may differ from estimates published by third parties or from similarly-titled metrics of our competitors due to differences in methodology.

	June 30,			December 31,
	2014			2013
Assets
Current assets:
Cash and cash equivalents	$	844,976		$	841,010
Short-term investments		1,252,055			1,393,044
Accounts receivable, net of allowance for doubtful accounts of $2,920 and $2,020 as of June 30, 2014 and December 31, 2013, respectively		287,082			247,328
Prepaid expenses and other current assets		79,773			93,297
Total current assets		2,463,886			2,574,679
Property and equipment, net		467,634			332,662
Intangible assets		105,497			77,627
Goodwill		514,601			363,477
Other assets		33,199			17,795
Total assets	$	3,584,817		$	3,366,240
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	23,084		$	27,994
Accrued and other current liabilities		247,547			110,310
Capital leases, short-term		99,744			87,126
Total current liabilities		370,375			225,430
Capital leases, long-term		101,929			110,520
Deferred and other long-term tax liabilities, net		31,929			59,500
Other long-term liabilities		33,991			20,784
Total liabilities		538,224			416,234
Commitments and contingencies (Note 11)
Stockholders' equity:
Common stock, $0.000005 par value-- 5,000,000 shares authorized; 612,682 and 569,922 shares issued and outstanding as of June 30, 2014 and December 31, 2013, respectively		3			3
Additional paid-in capital		4,318,021			3,944,952
Accumulated other comprehensive income (loss)		199			(323	)
Accumulated deficit		(1,271,630	)		(994,626	)
Total stockholders' equity		3,046,593			2,950,006
Total liabilities and stockholders' equity	$	3,584,817		$	3,366,240

The accompanying notes are an integral part of these consolidated financial statements.

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Revenue	$	312,166		$	139,292		$	562,658		$	253,635
Costs and expenses
Cost of revenue		100,027			50,573			185,530			91,828
Research and development		177,095			64,263			326,486			111,837
Sales and marketing		140,261			45,258			246,496			77,697
General and administrative		44,694			18,114			83,428			35,096
Total costs and expenses		462,077			178,208			841,940			316,458
Loss from operations		(149,911	)		(38,916	)		(279,282	)		(62,823	)
Interest income (expense), net		(2,110	)		(1,513	)		(4,677	)		(2,746	)
Other income (expense), net		1,780			(1,019	)		2,578			(2,548	)
Loss before income taxes		(150,241	)		(41,448	)		(281,381	)		(68,117	)
Provision (benefit) for income taxes		(5,599	)		777			(4,377	)		1,134
Net loss	$	(144,642	)	$	(42,225	)	$	(277,004	)	$	(69,251	)
Net loss per share attributable to common stockholders:
Basic	$	(0.24	)	$	(0.32	)	$	(0.47	)	$	(0.53	)
Diluted	$	(0.24	)	$	(0.32	)	$	(0.47	)	$	(0.53	)
Weighted-average shares used to compute net loss per share attributable to common stockholders:
Basic		595,607			132,224			587,760			129,853
Diluted		595,607			132,224			587,760			129,853

The accompanying notes are an integral part of these consolidated financial statements.

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Net loss	$	(144,642	)	$	(42,225	)	$	(277,004	)	$	(69,251	)
Other comprehensive income (loss):
Unrealized loss on investments in available-for-sale securities, net of tax		(47	)		(19	)		(78	)		(32	)
Foreign currency translation adjustment		542			127			600			36
Net change in accumulated other comprehensive loss		495			108			522			4
Comprehensive loss	$	(144,147	)	$	(42,117	)	$	(276,482	)	$	(69,247	)

The accompanying notes are an integral part of these consolidated financial statements.

	Six Months Ended June 30,
	2014			2013
Cash flows from operating activities
Net loss	$	(277,004	)	$	(69,251	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		85,582			48,647
Stock-based compensation expense		284,780			35,568
Provision for bad debt		1,436			245
Deferred income tax benefit		(7,737	)		(508	)
Non-cash acquisition-related costs		307			566
Amortization of investment premium and other		359			3,045
Changes in assets and liabilities, net of assets acquired and liabilities assumed from acquisitions:
Accounts receivable		(37,213	)		(11,349	)
Prepaid expenses and other assets		(17,229	)		(5,301	)
Accounts payable		1,407			(1,923	)
Accrued and other liabilities		89,692			9,920
Net cash provided by operating activities		124,380			9,659
Cash flows from investing activities
Purchases of property and equipment		(94,077	)		(26,761	)
Purchases of marketable securities		(1,039,014	)		(235,625	)
Proceeds from maturities of marketable securities		1,009,926			220,346
Proceeds from sales of marketable securities		168,138			24,300
Restricted cash		(11,716	)		(2,412	)
Business combinations, net of cash acquired		(132,896	)		(2,322	)
Net cash used in investing activities		(99,639	)		(22,474	)
Cash flows from financing activities
Taxes paid related to net share settlement of equity awards		(16,168	)		—
Repayments of capital lease obligations		(42,886	)		(31,068	)
Proceeds from exercise of stock options, net of repurchase		15,907			5,698
Proceeds from issuances of common stock under employee stock purchase plan		21,224			—
Payments of offering costs		(1,162	)		—
Net cash used in financing activities		(23,085	)		(25,370	)
Net increase (decrease) in cash and cash equivalents		1,656			(38,185	)
Foreign exchange effect on cash and cash equivalents		2,310			(634	)
Cash and cash equivalents at beginning of period		841,010			203,328
Cash and cash equivalents at end of period	$	844,976		$	164,509
Supplemental disclosures of non-cash investing and financing activities
Common and convertible preferred stock issued in connection with acquisitions	$	51,846		$	109,945
Equipment purchases under capital leases	$	47,739		$	58,757
Changes in accrued equipment purchases	$	43,597		$	9,331
Unpaid deferred offering costs	$	—		$	1,600

The accompanying notes are an integral part of these consolidated financial statements.

Twitter, Inc. (“Twitter” or the “Company”) was incorporated in Delaware in April 2007, and is headquartered in San Francisco, California. Twitter is a public platform where any user can create a Tweet and any user can follow other users. Each Tweet is limited to 140 characters of text, but can also contain rich media, including photos, videos and applications.

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP). The unaudited interim consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and reflect, in management’s opinion, all adjustments of a normal, recurring nature that are necessary for the fair statement of the Company’s financial position, results of operations and cash flows for the interim periods, but are not necessarily indicative of the results expected for the full fiscal year or any other period.

The accompanying interim consolidated financial statements and these related notes should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, as well as related disclosure of contingent assets and liabilities. Actual results could differ materially from the Company’s estimates. To the extent that there are material differences between these estimates and actual results, the Company’s financial condition or operating results will be affected. The Company bases its estimates on past experience and other assumptions that the Company believes are reasonable under the circumstances, and the Company evaluates these estimates on an ongoing basis.

In July 2013, the Financial Accounting Standards Board (“FASB”) issued a new accounting standard update on the financial statement presentation of unrecognized tax benefits. The new guidance provides that a liability related to an unrecognized tax benefit would be presented as a reduction of a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward, if such settlement is required or expected in the event the uncertain tax position is disallowed. The Company adopted this guidance prospectively for unrecognized tax benefits as of January 1, 2014. The adoption of this guidance resulted in a $15.8 million decrease in net deferred tax assets and the related liability for unrecognized tax benefits.

In May 2014, the FASB issued a new accounting standard update on revenue recognition from contracts with customers. The new guidance will replace all current U.S. GAAP guidance on this topic and eliminate all industry-specific guidance. According to the new guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration for which the Company expects to be entitled in exchange for those goods or services. This guidance will be effective for the Company beginning January 1, 2017 and can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. Early adoption is not permitted. The Company has not yet selected a transition method and is evaluating the impact of adopting this new accounting standard update on the financial statements and related disclosures.

In June 2014, the FASB issued new accounting standard update on stock-based compensation when the terms of an award provide that a performance target could be achieved after the requisite service period. The new guidance requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the periods for which the requisite service has already been rendered. This guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015 and can be applied either prospectively or retrospectively to all awards outstanding as of the beginning of the earliest annual period presented as an adjustment to opening retained earnings. Early adoption is permitted. Adoption of this new accounting standard update is expected to have no impact to the Company’s financial statements.

Cash, cash equivalents and short-term investments consist of the following (in thousands):

	June 30,		December 31,
	2014		2013
Cash and cash equivalents:
Cash	$	252,977	$	164,135
Money market funds		258,315		229,529
U.S. government and agency securities including treasury bills		207,189		251,593
Corporate notes and commercial paper		126,495		195,753
Total cash and cash equivalents	$	844,976	$	841,010
Short-term investments:
U.S. government and agency securities including treasury bills	$	677,229	$	785,536
Corporate notes, certificates of deposit and commercial paper		574,826		607,508
Total short-term investments	$	1,252,055	$	1,393,044

The following tables summarize unrealized gains and losses related to available-for-sale securities classified as short-term investments on the Company’s consolidated balance sheets (in thousands):

	June 30, 2014
	Gross		Gross		Gross			Aggregated
	Amortized		Unrealized		Unrealized			Estimated
	Costs		Gains		Losses			Fair Value
US Government and agency securities including treasury bills	$	677,207	$	40	$	(18	)	$	677,229
Corporate notes, certificates of deposit and commercial paper		575,002		7		(183	)		574,826
Total available-for-sale securities classified as short-term investments	$	1,252,209	$	47	$	(201	)	$	1,252,055

	December 31, 2013
	Gross		Gross		Gross			Aggregated
	Amortized		Unrealized		Unrealized			Estimated
	Costs		Gains		Losses			Fair Value
US Government and agency securities including treasury bills	$	785,535	$	22	$	(21	)	$	785,536
Corporate notes, certificates of deposit and commercial paper		607,590		11		(93	)		607,508
Total available-for-sale securities classified as short-term investments	$	1,393,125	$	33	$	(114	)	$	1,393,044

The available-for-sale securities classified as cash and cash equivalents on the consolidated balance sheets are not included in the tables above as the gross unrealized gains and losses were immaterial for each period; their carrying value approximates fair value because of the short maturity period of these instruments.

The following tables show all short-term investments in an unrealized loss position for which other-than-temporary impairment has not been recognized and the related gross unrealized losses and fair value, aggregated by investment category and the length of time that individual securities have been in a continuous unrealized loss position (in thousands):

	June 30, 2014
	Less than 12 Months					12 Months or Greater				Total
			Unrealized					Unrealized				Unrealized
	Fair Value		Loss			Fair Value		Loss		Fair Value		Loss
US Government and agency securities including treasury bills	$	230,873	$	(18	)	$	—	$	—	$	230,873	$	(18	)
Corporate notes, certificates of deposit and commercial paper		272,726		(183	)		—		—		272,726		(183	)
Total short-term investments in an unrealized loss position	$	503,599	$	(201	)	$	—	$	—	$	503,599	$	(201	)

	December 31, 2013
	Less than 12 Months					12 Months or Greater				Total
			Unrealized					Unrealized				Unrealized
	Fair Value		Loss			Fair Value		Loss		Fair Value		Loss
US Government and agency securities including treasury bills	$	230,478	$	(21	)	$	—	$	—	$	230,478	$	(21	)
Corporate notes, certificates of deposit and commercial paper		171,894		(93	)		—		—		171,894		(93	)
Total short-term investments in an unrealized loss position	$	402,372	$	(114	)	$	—	$	—	$	402,372	$	(114	)

Investments are reviewed periodically to identify possible other-than-temporary impairments. No impairment loss has been recorded on the securities included in the tables above as the Company believes that the decrease in fair value of these securities is temporary and expects to recover up to (or beyond) the initial cost of investment for these securities.

The following tables set forth the fair value of the Company’s financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2014 and December 31, 2013 based on the three-tier fair value hierarchy (in thousands):

	June 30, 2014
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents:
Money market funds	$	258,315	$	—	$	—	$	258,315
Treasury bills		174,097		—		—		174,097
Commercial paper		—		126,495		—		126,495
U.S. government securities		—		33,092		—		33,092
Short-term investments:
Treasury bills		190,192		—		—		190,192
Commercial paper		—		181,928		—		181,928
Corporate notes		—		316,114		—		316,114
U.S. government securities		—		487,037		—		487,037
Certificates of deposit		—		76,784		—		76,784
Total	$	622,604	$	1,221,450	$	—	$	1,844,054

	December 31, 2013
	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents:
Money market funds	$	229,529	$	—	$	—	$	229,529
Treasury bills		244,048		—		—		244,048
Commercial paper		—		194,742		—		194,742
U.S. government securities		—		7,545		—		7,545
Corporate notes		—		1,011		—		1,011
Short-term investments:
Treasury bills		265,878		—		—		265,878
Agency securities		—		18,286		—		18,286
Commercial paper		—		272,617		—		272,617
Corporate notes		—		255,546		—		255,546
U.S. government securities		—		501,372		—		501,372
Certificates of deposit		—		79,345		—		79,345
Total	$	739,455	$	1,330,464	$	—	$	2,069,919

The following table presents the detail of property and equipment, net for the periods presented (in thousands):

	June 30,			December 31,
	2014			2013
Property and equipment, net
Equipment	$	487,649		$	367,949
Furniture and leasehold improvements		103,744			54,965
Capitalized software		69,483			47,290
Construction in progress		44,065			29,523
Total		704,941			499,727
Less: Accumulated depreciation and amortization		(237,307	)		(167,065	)
Property and equipment, net	$	467,634		$	332,662

The following table presents the goodwill activities for the periods presented (in thousands):

For each of the period presented, gross goodwill balance equaled the net balance since no impairment charges have been recorded.

The following table presents the detail of other intangible assets for the periods presented (in thousands):

	Gross Carrying		Accumulated			Net Carrying
	Value		Amortization			Value
June 30, 2014:
Patents and developed technologies	$	133,405	$	(55,341	)	$	78,064
Publisher and advertiser relationships		30,400		(5,074	)		25,326
Assembled workforce		1,960		(580	)		1,380
Other intangible assets		1,100		(373	)		727
Total	$	166,865	$	(61,368	)	$	105,497
December 31, 2013:
Patents and developed technologies	$	100,553	$	(45,440	)	$	55,113
Publisher and advertiser relationships		21,100		(1,248	)		19,852
Assembled workforce		1,960		(300	)		1,660
Other intangible assets		1,100		(98	)		1,002
Total	$	124,713	$	(47,086	)	$	77,627

Amortization expense associated with other intangible assets for the three months ended June 30, 2014 and 2013 was $8.1 million and $3.3 million, respectively, and for the six months ended June 30, 2014 and 2013 was $14.3 million and $7.2 million, respectively.

Estimated future amortization expense as of June 30, 2014 is as follows (in thousands):

The following table presents the detail of prepaid and other current assets for the periods presented (in thousands):

The following table presents the detail of accrued and other current liabilities for the periods presented (in thousands):

	June 30,		December 31,
	2014		2013
Accrued compensation	$	88,779	$	29,882
Accrued fixed assets and maintenance		58,396		5,697
Deferred revenue		21,443		14,479
Accrued publisher payments		17,329		15,370
Accrued professional services		10,137		7,089
Accrued tax liabilities		11,845		9,515
Accrued other		39,618		28,278
Total	$	247,547	$	110,310

In May 2014, the Company completed its acquisition of privately held Gnip, Inc. (“Gnip”), a leading provider of social data and analytics headquartered in Boulder, Colorado. The acquisition is expected to allow the Company to further enhance its data analytics capabilities. Under the terms of the acquisition, the Company agreed to pay $107.3 million in cash and issue a total of 0.6 million shares of common stock including shares of restricted stock subject to continued employment in consideration of all of the issued and outstanding shares of capital stock of Gnip. In addition, the Company agreed to issue up to 0.4 million shares of the Company’s stock as a result of assumed Gnip equity awards held by individuals, who will continue to provide services to the Company. The fair value of total consideration of $134.1 million, including the earned portion of assumed stock options and other equity awards, was preliminarily allocated to the acquired tangible and intangible assets and assumed liabilities based on their estimated fair values at closing as follows: $23.2 million to developed technology, $9.3 million to customer relationships, $9.1 million to tangible assets acquired, $5.8 million to liabilities assumed, $6.4 million to deferred tax liability recorded, and the excess $104.7 million of the purchase price over the fair value of net assets acquired was recorded as goodwill. This goodwill is primarily attributable to the potential expansion and future development of the Company’s data products, expected synergies arising from the acquisition and the value of acquired talent. Goodwill is not expected to be deductible for U.S. income tax purposes. Both developed technology and customer relationships will be amortized on a straight-line basis over their estimated useful life of 60 months. The discounted cash flow method, which calculates the fair value of an asset based on the value of cash flows that the asset is expected to generate in the future, was used to estimate the fair value of these intangible assets acquired.

During the six months ended June 30, 2014, the Company acquired four other companies, which were accounted for as business combinations. The total purchase price of $55.5 million (paid in shares of the Company’s common stock having a total fair value of $25.1 million and cash of $30.4 million) for these acquisitions was preliminarily allocated as follows: $9.2 million to developed technologies, $1.4 million to net tangible assets acquired based on their estimated fair value on the acquisition date, $1.3 million to deferred tax liability, and the excess $46.2 million of the purchase price over the fair value of net assets acquired to goodwill. Goodwill resulting from these acquisitions is not expected to be deductible for U.S. income tax purposes. Developed technologies was valued using the cost approach and will be amortized on a straight-line basis over their estimated useful lives of 12 to 18 months.

In connection with all of the acquisitions completed during the six months ended June 30, 2014, the Company also agreed to pay cash and shares of the Company’s common stock with a total fair value up to $57.8 million, which is to be paid to certain employees of the acquired entities contingent upon their continued employment with the Company. The Company recognizes compensation expense related to the cash and equity consideration over the requisite services periods of up to 48 months from the respective acquisition dates on a straight-line basis. In addition, the Company will recognize approximately $7.9 million of stock-based compensation expense in relation to these assumed stock options over the remaining requisite service periods of up to 48 months from the respective acquisition dates on a straight-line basis, excluding the fair value of the assumed stock options that was allocated and recorded as part of the purchase price for the portion of the service period completed pre-acquisition.

The results of operations for each of these acquisitions have been included in the Company’s consolidated statements of operations since the date of acquisition. Pro forma revenue and results of operations for these acquisitions have not been presented because they do not have a material impact to the consolidated revenue and results of operations, either individually or in aggregate.

The Company computes net loss per share of common stock in conformity with the two-class method required for participating securities. The Company considers the shares issued upon the early exercise of stock options subject to repurchase to be participating securities, because holders of such shares have non-forfeitable dividend rights in the event a dividend is paid on common stock. Prior to their conversion to common stock, the Company also considered all series of the Company’s redeemable convertible preferred stock and convertible preferred stock to be participating securities as the holders of the preferred stock were entitled to receive a noncumulative dividend on a pari passu basis in the event that a dividend was paid on common stock. The holders of all series of convertible preferred stock and the holders of early exercised shares subject to repurchase do not have a contractual obligation to share in the losses of the Company. As such, the Company’s net losses for the three and six months ended June 30, 2014 and 2013 were not allocated to these participating securities.

Basic net loss per share is computed by dividing total net loss attributable to common stockholders by the weighted-average common shares outstanding. The weighted-average common shares outstanding is adjusted for shares subject to repurchase such as unvested restricted stock granted to employees in connection with acquisitions, contingently returnable shares and escrowed shares supporting indemnification obligations that are issued in connection with acquisitions and unvested stock options exercised. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding including potential dilutive common stock instruments. In the three and six months ended June 30, 2014 and 2013, the Company’s potential common stock instruments such as stock options, RSUs, shares to be issued under the Employee Stock Purchase Plan (“ESPP”), shares subject to repurchases and the warrant were not included in the computation of diluted loss per share as the effect of including these shares in the calculation would have been anti-dilutive.

The following table presents the calculation of basic and diluted net loss per share for periods presented (in thousands, except per share data).

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Net loss	$	(144,642	)	$	(42,225	)	$	(277,004	)	$	(69,251	)
Basic shares:
Weighted-average common shares outstanding		604,054			138,839			596,399			135,914
Weighted-average restricted stock subject to repurchase		(8,447	)		(6,615	)		(8,639	)		(6,061	)
Weighted-average shares used to compute basic net loss per share		595,607			132,224			587,760			129,853
Diluted shares:
Weighted-average shares used to compute diluted net loss per share		595,607			132,224			587,760			129,853
Net loss per share attributable to common stockholders:
Basic	$	(0.24	)	$	(0.32	)	$	(0.47	)	$	(0.53	)
Diluted	$	(0.24	)	$	(0.32	)	$	(0.47	)	$	(0.53	)

The following number of potential common shares at the end of each period were excluded from the calculation of diluted net loss per share attributable to common stockholders because their effect would have been anti-dilutive for the periods presented (in thousands):

Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when and if declared by the Board of Directors, subject to the prior rights of holders of all classes of stock outstanding. As of June 30, 2014, no dividends have been declared.

The Company has granted restricted common stock to certain key continuing employees in connection with the acquisitions. Vesting of this stock is dependent on the respective employee’s continued employment at the Company during the requisite service period, which is generally two to four years from the issuance date, and the Company has the option to repurchase the unvested shares upon termination of employment. The fair value of the restricted common stock issued to employees is recorded as compensation expense on a straight-line basis over the requisite service period.

The activities for the restricted common stock issued to employees for the six months ended June 30, 2014 are summarized as follows (in thousands, except per share data):

During the three months ended June 30, 2014 and 2013, the Company recorded $12.9 million and $7.3 million, respectively, and recorded $24.0 million and $12.5 million during the six months ended June 30, 2014 and 2013, respectively, of compensation expense related to restricted common stock issued to employees. As of June 30, 2014, there was $94.4 million of unamortized stock-based compensation expense related to restricted common stock issued which is expected to be recognized over a weighted-average period of 2.45 years.

As of June 30, 2014, the total number of RSUs outstanding under the 2013 Equity Incentive Plan was 18.2 million shares, and 82.4 million shares were available for future issuance. There were 88.7 million shares underlying options and RSUs outstanding under the 2007 Equity Incentive Plan as of June 30, 2014. No additional shares will be issued under the 2007 Equity Incentive Plan.

Under the 2007 Equity Incentive Plan, RSUs granted to (i) international employees; and (ii) domestic employees prior to February 2013 (“Pre-2013 RSUs”) vest upon the satisfaction of both a service condition and a performance condition. The service condition for these awards is generally satisfied over four years. The performance condition was satisfied in February 2014 pursuant to the terms of the Company’s equity plan. An aggregate of 19.6 million shares of common stock were issued as a result of vesting and settlement of the Pre-2013 RSUs during the six months ended June 30, 2014. During the same period, the Company's employees who are not executive officers were allowed to sell a portion of vested and settled Pre-2013 RSUs in the public market to satisfy the income tax obligations related to the vesting and settlement of such awards. The proceeds from selling the shares required to satisfy the employees' minimum statutory tax obligation were withheld and remitted to the appropriate tax authorities. In addition, the Company undertook a net settlement of vested Pre-2013 RSUs held by the executive officers upon satisfaction of the performance condition in 2014 and withheld shares and remitted income tax on behalf of the applicable executive officers of $16.2 million in cash at the applicable minimum statutory rates. These shares withheld by the Company as a result of the net settlement of Pre-2013 RSUs are no longer considered issued and outstanding. RSUs granted to domestic employees starting in February 2013 (“Post-2013 RSUs”) are not subject to a performance condition in order to vest. The majority of Post-2013 RSUs vest over a service period of four years. Under the terms of the 2007 Equity Incentive Plan and the 2013 Equity Incentive Plan, the shares underlying Post-2013 RSUs that satisfy the service condition are to be delivered to holders no later than the fifteenth day of the third month following the end of the calendar year the service condition is satisfied, or if later, the end of the Company’s tax year. An aggregate of 5.1 million shares of common stock were issued as a result of vesting and settlement of the Post-2013 RSUs during the six months ended June 30, 2014.

On May 15, 2014, the first purchase under the ESPP was made and employees purchased an aggregate of 957,392 shares at a price of $22.10 per share. As of June 30, 2014, 16.7 million shares were available for future issuance under the ESPP. During the three and six months ended June 30, 2014, the Company recorded $10.5 million and $16.7 million, respectively, of stock-based compensation expense related to the ESPP.

A summary of stock option activity for the six months ended June 30, 2014 is as follows (in thousands, except years and per share data):

Options Outstanding

Weighted-

Average

Remaining

Number of

Exercise

Contractual Life

Aggregate

Price Per Share

(in years)

Intrinsic Value

Outstanding at December 31, 2013

42,246

1.89

Large accelerated filer	¨	Accelerated filer	¨

Non-accelerated filer	x (Do not check if a smaller reporting company)	Smaller reporting company	¨

	PART I – FINANCIAL INFORMATION	Page
Item 1.	Financial Statements (Unaudited)	5
	Consolidated Balance Sheets as of June 30, 2014 and December 31, 2013	5
	Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2014 and June 30, 2013	6
	Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2014 and June 30, 2013	7
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2014 and June 30, 2013	8
	Notes to Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	36
	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	63
Item 5.	Other Information	63
Item 6.	Exhibits	63
	Signatures	64

Goodwill
Balance as of December 31, 2013	$	363,477
Gnip acquisition		104,747
Other acquisitions		46,174
Foreign currency translation adjustment		203
Balance as of June 30, 2014	$	514,601

Remainder of 2014	$	16,643
2015		27,507
2016		19,971
2017		9,764
2018		9,764
Thereafter		21,848
Total	$	105,497

	Three and Six Months Ended June 30,
	2014		2013
Stock options		27,470		44,157
RSUs		81,421		16,345
Employee stock purchase plan		1,147		—
Shares subject to repurchase		8,877		7,196
Warrant		—		117

				Weighted-Average
	Number of			Grant-Date Fair
	Shares			Value Per Share
Unvested restricted common stock at December 31, 2013		6,866		$	17.60
Granted		1,089		$	35.23
Vested		(1,833	)	$	16.77
Canceled		(98	)	$	13.46
Unvested restricted common stock at June 30, 2014		6,024		$	21.10