Twitter’s advertising revenue growth slowed to a trickle in the second quarter, reaching $1.08 billion, up 2% year over year, as the platform faced broad economic challenges and a court battle with billionaire Elon Musk, who offered $44 billion to buy the company before trying to break the deal.
Twitter released its second-quarter results on Friday, addressing its advertising slowdown and the Musk deal. It touched on bots, which are automated accounts that Musk has claimed are rampant on Twitter and are one of his arguments for why he shouldn’t be forced to buy the company. Twitter reports what it calls daily monetizable users, which are supposed to be legitimate accounts eligible for advertising, and Twitter has always maintained it has an average of about 5% spam bots.
In the second quarter, Twitter’s daily users increased 16.6% year over year to 237.8 million people. Twitter has always been a smaller platform than many of its peers; Snap on Thursday announced 347 million daily active users in the second quarter, up 18% from a year earlier. Snap’s revenue, which mostly comes from advertising, grew 13% year over year to $1.1 billion.
In its quarterly report, Snap said that demand for digital advertising has been dropping amid concerns about inflation, supply chain challenges and inflation. Advertisers are finding it easier to cut automated ad campaigns online.
Twitter’s unique challenge has been Musk, who offered to take the company private for $44 billion in April. Now, Musk appears to have buyer’s remorse. Twitter is valued on public markets at about $30 billion, with shares worth $39.52 apiece—well below Musk's $54.20 offer price. The stock slipped nearly 2% on Friday in premarket trading. While Twitter missed revenue estimates, the drop was not severe (Snap's shares are down 33% premarket) as Twitter's value is partly being buoyed by Musk’s offer.