Ask HN: Why does Twitter have 500M Dollar “Cost of revenue” per quarter?

https://news.ycombinator.com/item?id=31206153

by JonathanBeuys • 4 years ago

2 2 4 years ago

news.ycombinator.com

I was reading through their earning report ...

https://s22.q4cdn.com/826641620/files/doc_financials/2022/q1/Final-Q1%E2%80%9922-earnings-release.pdf

... and I am surprised that to generate $1B in revenue, they have $507M "Cost of revenue".

How can that be? How can they spend $507 million Dollars to keep their servers running?

dekhn• 4 years ago

it's money they pay to cause other sites to direct traffic to their site. Google has "traffic acquisition costs", which includes things like paying the companies that install an OS to make Chrome the default, and Google Search the defualt.

kklisura• 4 years ago

From the 10-Q report in March, 2021 [1]:

Cost of revenue includes infrastructure costs, other direct costs including revenue share expenses, amortization of acquired intangible assets and amortization of capitalized labor costs for internally developed software, allocated facilities costs, as well as traffic acquisition costs, or TAC. Infrastructure costs consist primarily of data center costs related to our co-located facilities, which include lease and hosting costs, related support and maintenance costs and energy and bandwidth costs, public cloud hosting costs, as well as depreciation of servers and networking equipment; and personnel-related costs, including salaries, benefits and stock-based compensation, for our operations teams. TAC consists of costs we incur with third parties in connection with the sale to advertisers of our advertising products that we place on third-party publishers’ websites, and applications or other offerings collectively resulting from acquisitions. Certain elements of our cost of revenue are fixed and cannot be reduced in the near term.

[1] https://www.sec.gov/ix?doc=/Archives/edgar/data/0001418091/0...

Ask HN: Why does Twitter have 500M Dollar “Cost of revenue” per quarter?

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