What just happened? In addition to suing Elon Musk, Twitter is also blaming the world’s richest man for his declining earnings. The platform saw its number of users increase in the second quarter of the year, but this did not translate into a healthier bottom line, which it attributes in part to the disruption caused by the call of Musk offers for the company before leaving.
Twitter’s second-quarter 2022 results show its second-quarter revenue was $1.18 billion, down both quarterly and year-over-year, albeit slightly. However, its average monetizable daily active users (mDAUs) increased by 16.6% from Q2 2021, reaching 237.8 million globally.
$1.18 billion is no small amount, but Twitter’s costs and expenses for the quarter totaled $1.52 billion, a 31% year-over-year increase. It reported net losses of $270 million, of which $33 million related to the “pending acquisition” of the company. Q2 2021 saw a trickle profit of $66 million.
Twitter says the decline in annual revenue is due to several factors, including uncertainty surrounding the company following Musk’s bid – the situation has made Twitter a less attractive prospect for advertisers. He also pointed to the economic downturn and an advertising industry reeling from Apple limiting the scope of user tracking last year, the same reasons Snap cited for its weaker-than-expected second-quarter results. Advertising sales increased, by only 2%, but that was not enough.
Twitter said it would not host an earnings conference call, issue a letter to shareholders or provide financial advice given Musk’s situation.
The saga of Musk’s attempt to buy Twitter ended earlier this month on the longstanding issue of the number of fake accounts populating the site. The company quickly launched a lawsuit in hopes of forcing the Tesla boss to go through with the deal or pay what would be a very large sum of money.
Many believe the law is likely on Twitter’s side in this case, and that prediction proved correct this week when a judge granted Twitter’s request for an expedited (five-day) trial that will take place this year ( October) instead of the next one.