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Twitter’s revenue and adjusted revenue reportedly fell about 40% year-over-year in December 2022 amid advertiser exits following its acquisition of Elon Musk.
Twitter has not disclosed earnings since Musk took the company private in late October. But Twitter reported lower revenue and profits in December 2022 in an update for investors, according to “people familiar with the matter” cited in a Wall Street Journal report on Friday.
Many big companies cut their advertising spend on Twitter shortly after the Musk acquisition. Twitter offered a special deal to advertisers through his December 2022, but it wasn’t enough to prevent a 40% revenue and profit decline.
As of mid-December, it was reported that about 70% of Twitter’s top 100 ad spenders prior to the Musk acquisition were not advertising on the platform. Earning numbers in early 2023 could be better, as some advertisers are back, thanks in part to deals offered leading up to the Super Bowl in February.
Exact revenue and profit figures for December 2021 or December 2022 are not clear. That’s because Twitter reported quarterly earnings when it was a publicly traded company. Fourth quarter 2021 revenue of $1.57 billion and net income of $182 million. Despite a profit in the fourth quarter of 2021, Twitter reported a net loss of $221 million for the full year 2021.
“Twitter posted net losses in eight of the decade from 2012 to 2021 and has not posted an annual profit since 2019,” the WSJ wrote. His last public earnings call on Twitter before Musk acquired the company was for his second quarter of 2022.
Musk says he saved Twitter from bankruptcy
A week after the acquisition, Musk Said That Twitter is losing over $4 million a day. He cut costs by laying off half of Twitter’s staff, laying off thousands of contractors, and issuing an ultimatum for many of its employees to resign. In early February, Musk said it had been a ‘very tough’ three months because he had to ‘save Twitter from bankruptcy.
Musk reportedly used $13 billion in debt to finance the acquisition, resulting in annual interest payments of $1.5 billion. Twitter reportedly paid him about $300 million in initial interest in January. The WSJ article states, “Some of Twitter’s debt carries interest at nearly 15% per annum.
Musk appears to have long-term plans to bring payment functionality to Twitter to compete with services like PayPal, but for now it relies on advertising and subscriptions for revenue. His revamped Twitter Blue service hasn’t attracted many paying subscribers, and Twitter is nowhere near Musk’s goal of “subscribing about half of its revenue.”
Another question is how to keep Twitter running smoothly with far fewer staff thanks to Musk’s cost savings. The challenge was evident today when an API change seemed to cut all links on Twitter for about 45 minutes.Musk I have written “The code stack is very fragile for no good reason,” he said on Twitter, claiming that “a complete rewrite would be required,” while stating that “small API changes had a big impact.”
