Twitter's cash flow remains negative because of a nearly 50% drop in advertising revenue and a heavy debt load, Elon Musk said on Saturday, falling short of his expectation in March that Twitter could reach cash flow positive by June, according to Reuters.
"Need to reach positive cash flow before we have the luxury of anything else," Musk said in a tweet replying to suggestions on recapitalization.
Musk said on Sunday in another tweet that Twitter did not see the increase in advertising revenue that had been expected in June, adding, "July is a bit more promising." Twitter Spaces also hasn't generated revenue yet and is "all-cost", Musk said.
This is the latest sign that the aggressive cost-cutting measures since Musk acquired Twitter in October alone are not enough to get Twitter to cash flow positive, and suggests Twitter's ad revenue may have not recovered as fast as Musk suggested in an interview in April with the BBC that most advertisers had returned to the site.
After laying off thousands of employees and cutting cloud service bills, Musk had said the company reduced its non-debt expenditures to $1.5 billion from a projected $4.5 billion in 2023. Twitter also faces annual interest payments of about $1.5 billion as a result of the debt it took on in the $44 billion deal that turned the company private.
It is unclear what time frame Musk was referring to by the 50% drop in ad revenue. He has said Twitter was on track to post $3 billion in revenue in 2023, down from $5.1 billion in 2021.
Twitter loses nearly half advertising revenue since Elon Musk takeover https://t.co/2XPT4oVcIp
— BBC News (UK) (@BBCNews) July 16, 2023
Twitter has been criticized over lax content moderation, followed by an exodus of many advertisers who did not want their ads appearing next to inappropriate content.
No comments:
Post a Comment