Twitter Inc., in one of its last earnings reports before Elon Musk takes the company private, reported revenue that missed analysts’ estimates, reflecting a slowdown in advertising.
Revenue rose to $1.2 billion in the first quarter, the social media company said on Thursday. That compared with the average forecast for $1.23 billion, according to data compiled by Bloomberg. The 16% gain in sales was the worst pace of growth in six quarters, and is in line with reports from Snap Inc. and Meta Platforms Inc., which are grappling with lower advertising spending due to issues with supply chains, inflation and the ongoing war in Ukraine.
At the same time, Twitter reported a 16% increase in daily active users to 229 million beating estimates for 226.4 million. The stock was little changed at $48.93 in premarket trading, given Musk’s agreement earlier this week to buy the company for $54.20 per share.
Twitter had previously set a goal to reach 315 million daily users by the end of 2023 and boost revenue to $7.5 billion annually by the same period. That means Twitter would have needed to add 86 million more new users over the next seven quarters, an average of 12.3 million per quarter. The company added just 25 million total new users in 2021.
On Thursday, Twitter said it was withdrawing all “previously provided goals and outlook.”
The company also disclosed that an error had resulted in a miscalculation of daily users over three years. In the fourth quarter of 2021, for example, Twitter’s reported user total of 216.6 million daily users was 1.9 million users too high.
Twitter has found itself the subject of much of the conversation on its own platform in recent weeks as Musk’s $44 billion bid to buy the company has played out in public. The billionaire has his own ideas about how to improve the 16-year-old social networking site, which he has promised to turn into an unfettered free-speech zone, a move that he has said is “essential to a functioning democracy.”
The outspoken entrepreneur with 86 million followers has hinted at a long list of changes he wants to make, while at the same time casting doubt on the advertising model that accounts for the bulk of Twitter’s …read more
Source:: Time – Business