Twitter, in its news release, noted “advertising industry headwinds related to the macro environment as well as uncertainty related to Twitter’s pending acquisition.” The company said it will not host an earnings conference call due to the pending deal, which He’s suing Mr. Musk to complete it.
Twitter’s revenue fell to $1.18 billion from $1.19 billion last year, and was below the average analyst estimate of $1.32 billion in
Advertising revenue increased 2% from the previous year to $1.08 billion. In the first quarter, advertising revenue grew 23%.
Twitter slows ad revenue Youssef Scully, an analyst at Trust Securities, said the turmoil surrounding Mr. Musk’s deal is irritating advertisers. “Advertisers don’t even want to engage with Twitter until they know what’s going on,” he said. The company is “stuck in the middle of a nightmare”.
Twitter shares were up nearly 1% to about $40 midday Friday. Snap shares are down nearly 40%.
Mr Musk’s $54.20 per share bid for Twitter helped push up the company’s stock price amidst Sharp selling in technology stocks. Twitter’s stock price is down less than 10% so far this year, while the heavy Nasdaq Composite has lost more than 20%.
“Thank God they have a deal in place because the stock would be much lower without it,” said Michael Nathanson, analyst at Moffett Nathanson.
Twitter reported a loss of $270 million, or 35 cents a share, compared to last year’s profit of $65.6 million, or 8 cents a share. Excluding items such as stock-based compensation, the company reported an adjusted loss of 8 cents per share. Analysts, on average, were expecting adjusted earnings of 14 cents per share, FactSet shows.
The number of monetized daily active users on Twitter increased to 237.8 million from 229 million in the first quarter and 206 million last year. The number of US users – who make up the company’s largest market – grew to 41.5 million from 39.6 million in the first quarter and 37 million a year ago. The company said the increase was driven by product improvements and global conversations about current events.
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Justin Patterson, analyst at KeyBanc Capital Markets, Facebook. He said uncertainty about the future of the deal with Mr. Musk could hinder that and product innovation.
In a lawsuit against Mr. Musk, Twitter said his “actions detract from the completion of the deal, and Musk’s repeated disregard for Twitter and its employees, are creating uncertainty.” The complaint says such behavior “also exposes Twitter to negative effects on its business operations, employees, and stock price.”
A Twitter spokesperson said the company has made more than a dozen recent product innovations, including Twitter Circle, a way to send tweets to a select group; CoTweets, which allow the authors of a tweet to post simultaneously; and Unmention, a feature that allows users to remove themselves from Twitter conversations that others have brought them into.
When releasing its results in April, Twitter said it was withdrawing previous targets and expectations and that it would not provide forward-looking guidance. Before courting Mr. Musk, Twitter had been working on three main goals by the end of 2023: to surpass $7.5 billion in annual revenue, reach 315 million daily users, and double the pace of its production of new technology.
Earlier this week, the Chief Justice of the Delaware Chancery Twitter’s request granted to expedite its lawsuit against Mr. Musk. A five-day trial is scheduled for October Despite the opposition of the billionaire’s lawyerwho argued that The trial must take place on or after February 13 next year.
Mr. Musk said the main reason for backing out of the deal was a lack of confidence in Twitter’s estimate that less than 5% of monetized daily active users are from spam or fake accounts. He said that estimate may be too low.
Twitter has said for years in its securities filings that the number of fake accounts and spam on its platform may be higher than its estimates. The company said in its lawsuit against Mr. Musk that Has buyer’s remorse Over the Fall in stock prices Since he agreed to the deal in April.
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In a recent lawsuit, Mr Musk’s team said they became concerned about Twitter user numbers after the company disclosed in its filing. April earnings report It overestimated its user base for nearly three years to the end of 2021 due to an error in how it counts people linked to multiple accounts. The review reduced the number of monetized daily active users by 0.9% for the fourth quarter of last year.
The lawsuit also said that Mr. Musk met with Twitter executives in May to discuss how the company measures spam and that he was “surprised to learn how small this process was” and noted the lack of automated tools to help with the account. .
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