Twitter Inc., in one of its last earnings reports before Elon Musk takes the company private, reported revenue that missed analysts’ estimates, reflecting a slowdown in advertising.
Revenue rose to $1.2 billion in the first quarter, the social media company said on Thursday. That compared with the average forecast of $1.23 billion, according to data compiled by Bloomberg. The 16% gain in sales was the worst pace of growth in six quarters, and is in line with reports from Snap Inc. and Meta Platforms Inc., which are grappling with lower advertising spending due to issues with supply chains, inflation and the ongoing war in Ukraine.
At the same time, Twitter reported a 16% increase in daily active users, to 229 million beating estimates for 226.4 million. The stock fell nearly 1% to $48.10 in early trading. Musk agreed to buy the company for $54.20 per share.
Twitter has found itself the subject of much of the conversation on its own platform in recent weeks as Musk’s $44 billion bid to buy the company has played out in public. The billionaire has his own ideas about how to improve the 16-year-old social networking site, which he has promised to turn into an unfettered free-speech zone, a move that he has said is “essential to a functioning democracy.”
Subscribe to Ad Age now for the latest industry news and analysis.
The outspoken entrepreneur with 86 million followers has hinted at a long list of changes he wants to make, while at the same time casting doubt on the advertising model that accounts for the bulk of Twitter’s revenue. He’s on record as saying he’s not in it for the money. “I don’t care about the economics at all,” Musk said at a TED conference when the deal was announced. Some have speculated that Musk may try and push more aggressively into a different business model, like subscriptions. Twitter currently offers a $3 monthly subscription service for the site’s most active users, and also makes some money through a data licensing business.