The official profile of Elon Musk in the Twitter social network.
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Twitter reported second-quarter earnings on Friday that missed analysts’ estimates for earnings, revenue and user growth.
Shares of Twitter fell more than 1% in early trading.
Here are the basic numbers:
- Earnings per share: A loss of 8 cents adjusted, versus an expected profit of 14 cents, according to a Refinitiv survey of analysts
- Revenue: $1.18 billion vs. $1.32 billion
- Daily active users (mDAUs): 237.8 million vs. 238.08 million expected, according to Refinitiv
Twitter reported that revenue fell 1% year over year to $1.18 billion. Wall Street had expected $1.32 billion, representing a 10.5% year-over-year increase. That marked Twitter’s biggest revenue miss ever, with the results coming in 11% below estimates, according to Refinitiv.
The company blamed the revenue decline in part on ad industry headwinds related to the broader challenging macroeconomic environment, as well as “uncertainty related to the pending acquisition of Twitter by an affiliate of Elon Musk.”
Twitter and other social media companies that rely heavily on advertising have felt the brunt of macroeconomic challenges as fears over inflation, interest rate concerns, ongoing supply chain issues and the war in Ukraine have prompted some advertisers and brands to adjust their advertising expenses. On Thursday, Snap reported disappointing second-quarter results and said it plans to slow hiring due to weakening revenue growth, sending its shares down 25% in extended trading.
Given the pending acquisition by Musk, Twitter said it would not provide forward-looking guidance for the third quarter. It also does not host a conference call with analysts to discuss earnings results.
Costs and expenses in the quarter increased 31% year-over-year to $1.52 billion. The company swung to a loss of 8 cents per share, posting its first adjusted loss in two years and the second ever.
Twitter said expenses related to the Musk acquisition were approximately $33 million in the second quarter. Compensation-related expense was approximately $19 million in the second quarter. Earlier this month, Twitter laid off a third of its talent recruitment team, according to the Wall Street Journal.
Twitter is locked in a legal battle with Musk over his proposed $44 billion acquisition of the company. Tesla’s CEO tried to back out of the deal. Musk claimed that Twitter underreported the number of spam and fraudulent accounts and did not provide information about fake accounts. Twitter sued Musk and some of his associates earlier this month over allegations that the billionaire “is refusing to fulfill his obligations to Twitter and its shareholders because the deal he signed no longer serves his personal interests.”
Twitter scored an early victory Tuesday when a Delaware court chancellor ruled in favor of an expedited five-day trial to begin in October.
CNBC’s Robert Humm contributed to this report.
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