Twitter’s Q2 results reported on Friday missed estimates made by analysts on user growth, earnings, and revenue.
On Friday morning, the social media company’s shares went down slightly. CNBC reported the key numbers the company revealed:
Earnings per share: A loss of 8 cents, adjusted, vs expected earnings of 14 cents, according to a Refinitiv survey of analysts
Revenue: $1.18 billion vs $1.32 billion
Monetizable Daily Active Users (mDAUs): 237.8 million vs 238.08 million expected, according to Refinitiv
Twitter’s revenue went down by 1% year over year, reaching $1.18 billion. Wall Street had estimated it to be $1.32 billion, which would have represented 10.5% growth year over year. The actual numbers marked the social media company’s most significant revenue miss on record, with actual numbers coming in 11% under estimates, as per Refinitiv.
Twitter Partially Blames Pending Acquisition by Elon Musk
The company partially blamed this drop on ad industry headwinds connected to the challenging macroeconomic environment. They also partially blamed the “uncertainty related to the pending acquisition of Twitter by an affiliate of Elon Musk.”
With Musk’s acquisition of Twitter still in limbo, the social media company revealed that it would not release forward-looking guidance for Q3. It also plans to skip hosting a conference call with analysts to talk about earnings results.
Costs and expenses in the quarter went up 31% year over year to $1.52 billion. Twitter experienced a loss of 8 cents per share, reporting its first adjusted loss in a couple of year and the second ever recorded.
The social media company also mentioned that costs related to Elon Musk’s acquisition of the company were around $33 million in the second quarter. Severance-related expenses were around $19 million in the same quarter. Earlier in July, Twitter let go of a third of its talent acquisition division, as per The Wall Street Journal.
— CNBC (@CNBC) July 22, 2022
Currently, Twitter and Musk are locked in a legal battle over the latter’s proposed $44 billion acquisition of the company. The multi-billionaire has been trying to back out of the deal. As per Musk, the company underreported the numbers of spam and fraud accounts on the platform. He also claimed that the social media company failed to give information about fake accounts. The social media company filed a lawsuit against Musk and several of his associates earlier this munch over allegations that the Tesla CEO “refuses to honor his obligations to Twitter and its stockholders because the deal he signed no longer serves his personal interests.”
On Tuesday, a Delaware Court of Chancery chancellor granted Twitter an early win by ruling in favor of an expedited five-day trial. The said trial is scheduled to start in October 2022.