Twitter’s CFO Takes Charge as CEO Steps Back on Call

Twitter Inc. Chief Financial Officer Anthony Noto is putting his stamp on the company after four months on the job. That was underlined yesterday on the microblogging service’s earnings call.

Noto dominated most of Twitter’s hour-long third-quarter call yesterday, delivering 20 of the 26 responses to questions from Wall Street analysts, while Chief Executive Officer Dick Costolo answered six times. Seven analysts asked directly for Noto to comment on their questions, with two requesting Costolo.

The CFO answered queries like a veteran, explaining everything from product plans to international expansion, even though it was his second Twitter results call. The familiarity comes from experience -- last year, when he was still at Goldman Sachs Group Inc., Noto was the executive who led Twitter’s initial public offering. When one analyst wanted to know how many of the company’s monthly active users also visited the service daily, Noto said, “We get this question on every conference call.”

The session was a shift for Costolo, who delivered roughly the same number of responses as Twitter’s CFO on the previous two quarterly financial calls this year, according to data compiled by Bloomberg. Costolo, who hired Noto to replace CFO Mike Gupta in July, said in an interview that he welcomes the former investment banker’s can-do spirit.

“Anthony’s ability to come up to speed quickly has been just delightful,” Costolo said. “The rigor that he brings to everything he does is fantastic and causes everyone he works with to make sure they’re being just as rigorous as he is. It ups everyone’s game.”

Noto’s Experience

Noto worked at Goldman Sachs from 1999 until 2008, and was the top-ranked analyst for research on the Internet industry by Institutional Investor magazine from 2003 to 2007. He left to become CFO of the National Football League, then rejoined Goldman Sachs in 2010. Twitter declined to make Noto available for comment.

Noto has come in at a crucial period for Twitter. His job is to help explain the company’s revenue prospects to Wall Street as it struggles with investor perceptions over slowing user growth. Twitter’s stock plunged as much as 14 percent today, the most since May, after it said active users rose 23 percent in the third quarter from a year ago, down from 24 percent growth in the prior quarter.

On the call yesterday, Noto and Costolo explained that the company has ways to grow beyond its main application, such as by advertising across other mobile apps and by making the service easier to use. The San Francisco-based company is also pitching mobile app developers on using its services in their products, so that they will run ads powered by Twitter.

Convertible Debt

In the interview, Costolo said Noto has made progress for the company in other ways. Twitter got a favorable rate for the more than $1.8 billion in convertible debt that it sold last month, even though the company didn’t have anything in mind to buy with the money at the time, the CEO said.

“Anthony really helped lead the charge on that internally,” Costolo said. “It allows us to be opportunistic and allows us to continue to be aggressive about opportunities that we want to take advantage of.”

Costolo added that he has no regrets about how he explained the company’s business during the initial public offering road show last year.

Twitter’s strategy for outside developers “wasn’t something that was ready in November of 2013,” Costolo said. “Now that it is, we’re in a position to articulate to the market how we see our evolution.”

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