Twitter has claimed it would have made more money in the last few months if Elon Musk had not been involved in talks about buying the company. This is what the company claims in its second-quarter earnings report, which cites Musk as a factor in a decline in its revenue results, which fell year over year to $1.18 billion from $1.19 billion. The Q2 earnings announcement was made this morning.
However, that isn’t the only reason Twitter is losing money. The company also cites ad industry issues, similar poor performance Snap shared yesterday and the general economic environment. The most Twitter-specific issue on the list is the “uncertainty related to the pending acquisition of Twitter by an affiliate of Elon Musk.”
In April, recall Musk agreed to buy Twitter, and for the past few weeks, he has developed cold feet and attempting to back out of the deal. The two parties will now go to court in October after Musk filed with the Securities and Exchange Commission earlier this month in an attempt to legally terminate the contract. Twitter wants Musk to go through with the acquisition, which would cost more than the stock price at the moment.
However, for the time being, the disorganized acquisition appears to be making it more challenging for Twitter to sell advertisements. Ad Age recently reported that the turmoil had put the company’s ad sales in “disarray,” while Bloomberg earlier said that Twitter was doing its best to calm advertisers’ concerns about how Musk would bring changes to the platform.
Despite the fact that Twitter’s overall revenue decreased, its ad revenues were still up 2 per cent from the previous year. However, the business must increase ad sales revenue far more quickly. Twitter’s net loss for the quarter was $270 million, compared to a profit of $66 million in the same period last year. When comparing the revenue amount to the growth trend, the situation is far worse. Twitter’s income increased by 74% from this time last year. It’s now getting smaller.
Moving away from revenues, Twitter refuses to give Musk credit for one thing though and that would be its user growth. More than 237 million users per day were reported by the service, an increase from 229 million users during the previous quarter. Naturally, “ongoing product improvements” were to blame for that.