Twitter Misses Earnings Expectations, Blames Elon Musk

Twitter’s second quarter earnings were released on Friday, falling short of analyst expectations in terms of sales, profitability, and user growth. The company cited challenges facing the advertising sector as well as “uncertainty” related to Elon Musk and his withdrawn acquisition attempt.

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According to CNBC, Twitter released second-quarter financial results on Friday that fell short of analyst projections in terms of earnings, sales, and user growth. In early Friday trade, the share price of Twitter remained unchanged. The report’s major numbers were published by CNBC:

– Earnings per share: A loss of 8 cents, adjusted, compared to analysts’ expectations of 14 cents in earnings per share
– Revenue: $1.18 billion as opposed to $1.32 billion
-According to Refinitiv, monetizable daily active users (mDAUs) were 237.8 million versus 238.08 million projected.

Twitter reported a 1% year-over-year decline in sales to $1.18 billion, vs Wall Street expectations of $1.32 billion, or 10.5% annual growth. With results coming in 11% under expectations, Refinitiv reported that Twitter’s most recent earnings report is its largest revenue failure to date.

Twitter attributed a portion of the revenue decline to “uncertainty relating to the prospective acquisition of Twitter by an affiliate of Elon Musk” as well as “ad industry headwinds linked to the online advertising business.” Early this month, Musk withdrew from the agreement to purchase the social networking platform, setting off a court battle between the two parties.

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Macroeconomic concerns have had an impact on social media sites like Twitter, which heavily rely on advertising. Concerns about supply chain problems, interest rates, and inflation have caused many advertisers and corporations to cut back on their advertising budgets. Snap recently disclosed similarly dismal financial results and announced intentions to reduce recruiting as a result of weaker revenue growth, which led to a 36 percent decline in share price in Friday morning trade.

Twitter said that due to the ongoing legal battle with Elon Musk over the acquisition of the company, it would not provide forward-looking guidance for the third quarter.