Susquehanna International Group Comments on Twitter Following Pre-IPO Conference Call

In a report published Friday, Susquehanna International Group analyst Brian Nowak commented on recent developments related to

. In the report, Susquehanna International Group noted, “TWTR has Favorable Macro Positioning in the Social Advertising Space: Social is the fastest growing segment in the display market, driving over 100% of forward display market growth thru 2017. As the 2nd largest leisure social network (behind Facebook) with 76% of its users accessing its platform via mobile, we believe Twitter is well positioned to capture a meaningful share of ad dollars looking to spend on social and mobile platforms. But it is Still in its Monetization Infancy: Despite building a large (232mn) and growing (+39% YoY) global user base, and growing ad revenue 121% YoY over the first 9 months of 2013, TWTR is still in its monetization infancy. The company still generates the lowest display ad dollars per user of any major player, trailing even the ailing portal models AOL and Yahoo￿ (by 44%-45%) and Facebook (by 72%). Which Speaks to the Monetization Upside Opportunity: Our analyses of 4 big monetization opportunities -- 1) Evolving into a real-time personalized magazine, 2) Mobile advertising, 3) Improved ad units like video and app installs, and 4) Innovating around second-screen viewing to catch experimental TV ad dollars -- highlight the long-term optionality for earnings upside. Innovation will Lead to Faster Ad Dollar Flow: Innovation (such as an expanded rollout of Twitter Cards, video ad units, app installs, and its Amplify partnerships) will improve Twitter's advertising offering. We are especially encouraged by TWTR's video ad opportunity and potential to monetize its entrenched and growing position in coincident (￿second-screen￿) viewing, which, even thru conservative assumptions, could add a total of ~$110mn (or ~10%) to '14 ad rev.”