Twitter Inc. reported a decline in revenue that the social-media company blamed on advertising weakness and uncertainty related to its pending acquisition by Elon Musk.
Twitter’s results Friday follow rival social-media company Snap Inc. posting its weakest-ever quarterly sales growth because of what it said was “increasing competition for advertising dollars that are now growing more slowly.”
Tweet on Quarterly Twitter results
@Twitter reported a decline in revenue!
the social-media company, shifted blamed on advertising weakness and uncertainty related to its pending trial & acquisition by Elon Musk!#Twitter #ElonMusk #Newsnight https://t.co/y58tjfqj4s
— The_Journalbiz (@the_journalbiz) July 22, 2022
Twitter, in its news release, cites
“advertising industry headwinds associated with the macroenvironment as well as uncertainty related to the pending acquisition of Twitter.” The company won’t host an earnings conference call because of the pending transaction, which it is suing Mr. Musk to complete.
Twitter reported a loss of $270 million, (or 35 cents a share) compared with year-ago earnings of $65.6 million, or 8 cents a share, the company reported an adjusted loss of 8 cents a share. Analysts, on average, were expecting an adjusted profit of 14 cents a share, FactSet shows.
- Advertising revenue rose 2% from a year earlier to $1.08 billion. In the first quarter, advertising revenue grew 23%.
Twitter’s slowdown in ad revenue suggests the turmoil surrounding Mr. Musk’s deal is annoying advertisers, “Advertisers don’t even want to deal with Twitter until they know what’s going on,” as an end result. The company is “caught in the middle of a nightmare.”
Mr. Musk’s $54.20-a-share bid for Twitter has helped hold up the company’s stock price amid a sharp selloff in tech company stocks. Twitter’s stock price was down less than 10% so far this year,
Modest increases in Twitter’s user base aren’t enough to excite advertisers at a time when the company is in a legal battle over its fate, said Benchmark analyst Mark Zgutowicz.
“Twitter’s been focused on Elon over the last quarter. It’s an easy reason for advertisers to shift their spend away from Twitter,”