In late October 2022, Elon Musk bought Twitter and took it private, causing significant changes in the company’s operations. According to a recent Wall Street Journal report, Twitter’s revenue and adjusted earnings fell by about 40% year over year in December 2022 following an advertiser exodus after Musk’s takeover.
Many big companies cut advertising spending on Twitter shortly after Musk’s acquisition, largely over concerns about content moderation. This led Twitter to offer special deals to advertisers throughout December 2022, but it wasn’t enough to prevent the 40% revenue and earnings decline.
70% twitter advertiser Left Twitter.
Halfway through December, about 70% of Twitter’s top 100 ad spenders from before the Musk buyout reportedly weren’t advertising on the platform. Some advertisers have returned, in part thanks to deals offered for the Super Bowl in February, so revenue numbers in the early months of 2023 could be better.
However, it’s not clear what the exact revenue and earnings numbers were for either December 2021 or December 2022 because Twitter reported quarterly earnings when it was a public company. Its Q4 2021 revenue was $1.57 billion and net income was $182 million. Despite the Q4 2021 profit, Twitter reported a net loss of $221 million for the full year of 2021.
Musk has tried to cut costs and boost the company’s income by laying off half of Twitter‘s staff, terminating thousands of contractors, and offering special deals to advertisers. He even tried to sell Twitter’s office plants to staff, according to an anonymous engineer who spoke to the BBC.
In early February, Musk said he had an “extremely tough” three months because he “had to save Twitter from bankruptcy… Twitter still has challenges, but is now trending to breakeven if we keep at it.”
Musk used $13 billion of debt to fund his takeover, which resulted in interest payments reportedly totaling $1.5 billion a year. Twitter reportedly made the first interest payment of about $300 million in January. “Some of Twitter’s debt carries an annual interest rate of almost 15 percent,” the WSJ article said.
Twitter is a social media platform that allows users to post and interact with short messages called “tweets.” It was founded in 2006 by Jack Dorsey, Biz Stone, and Evan Williams, and has since become one of the most popular social media platforms in the world.
Twitter has had a significant impact on how people communicate and share information online. The platform has been used for a wide range of purposes, including breaking news, political campaigns, marketing, and social activism. It has been praised for its ability to connect people across the world and give a voice to underrepresented communities.
However, Twitter has also faced criticism for its content moderation policies, which have been accused of being inconsistent and biased. The platform has struggled to address issues such as hate speech, fake news, and harassment, which have led to calls for greater regulation and oversight.
In recent years, Twitter has also faced financial challenges. The platform has struggled to generate consistent profits, and its stock price has been volatile. In 2022, Elon Musk acquired Twitter and took it private, leading to a significant drop in advertising revenue and earnings. Musk has since implemented cost-cutting measures, including layoffs and selling Twitter’s assets, in an attempt to make the platform more profitable.
Despite these challenges, Twitter remains an important and influential platform for communication and information sharing. Its ability to connect people and amplify voices has made it a powerful tool for social change and a vital part of the online landscape. However, as with any social media platform, it also poses challenges and risks that must be addressed in order to ensure that it continues to serve the public good.
Musk seems to have long-term plans to bring payment functionality to Twitter and thus compete against services like PayPal, but for now it relies on advertising and subscriptions for revenue. His revamped Twitter Blue service hasn’t attracted many paying subscribers, leaving Twitter far short of Musk’s goal for “roughly half of our revenue to be subscription.”
In conclusion, Twitter’s revenue and earnings reportedly fell by about 40% year over year in December 2022 amid an advertiser exodus following Elon Musk’s takeover. Musk has tried desperately to cut costs and boost the company’s income, but it remains to be seen how successful he will be in turning around the social media giant’s fortunes.