Twitter attributes reduced revenue to Elon Musk and drop in digital advertising | companies

Twitter closed the second quarter with losses of $270 million (about 264 million euros), compared to the profit of $65 million it had achieved in the same period of the previous year. The social network’s revenue between April and June 2022 fell 1.1% to $1,176.6 million. The company did not meet the expectations of analysts who expected a turnover for the second quarter of 1.320 million.

The multinational attributed the decline in revenue to “uncertainty related to the impending acquisition of Twitter by Elon Musk” and lower digital advertising spending due to the current economic uncertainty. The social network announced in a statement that “in light of the impending acquisition by an affiliate of Elon Musk, Twitter will not be hosting a second quarter 2022 earnings conference call.”

Twitter’s monetizable daily active users grew to 237.7 million from 229 million in the first quarter and up 16.6% from a year ago. The figure was higher than analysts’ estimates of 236 million. Of the total number of active users, Twitter had 41.5 million in the United States, up from 39.6 million in the first quarter and 14.7% more than a year earlier. At the same time, at the international level, the annual increase was 17%, to 196.3 million, against 189.4 million in the first quarter.

In the first half, the company posted a net profit of 243.3 million dollars, 82% more than a year earlier, while revenues rose 6.8% to 2,377.6 million.

Twitter costs rose 31% to $1.52 billion, the company reported, with more than $33 million spent in the second quarter on issues related to the Musk acquisition. Severance costs were approximately $19 million over the same period. The company announced a few weeks ago that it was laying off a third of its talent recruitment team.

The release of the results comes after a Delaware court specializing in US commercial disputes ruled that the trial between Twitter and the tycoon would be held next October and last five days, after reaching an agreement with the social network who had asked for a speedy trial because of Musk’s moves. not proceeding with the acquisition of the social platform for 44,000 million dollars, harmed the activity of the company.

Twitter’s results come a day after rival Snap lost more than a quarter of its stock value after it missed revenue and profit expectations and announced plans to slow hiring and adjust its business strategy.

After the boost that social platforms have experienced with the pandemic, they are suffering today as brands reduce their advertising expenditure with inflation, rising prices and the uncertainties born from the war in Ukraine and the problems supply.

Twitter shares rise slightly today, outperforming $39.6, still a far cry from the $54.20 per share agreed by Musk. Shares of the company are down about 10% so far this year, while the Nasdaq has lost more than 20%.

Twitter is preparing for the legal confrontation against Musk, after the founder of Tesla communicated to the social network his resignation from the purchase agreement, arguing that it is not estimated that less than 5% of the social network’s accounts are spam or fake accounts. He puts the figure at around 20%. In mid-May, Musk had already temporarily suspended the purchase, agreed at the end of April, pending clarification of the number of fake accounts.

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