Elon Musk Admits Twitter Still Seeing Negative Cash Flow With 50% Drop In Ads Revenue

Elon Musk Admits Twitter Still Seeing Negative Cash Flow With 50% Drop In Ads Revenue

[ad_1]

Elon Musk revealed on Saturday that Twitter’s cash flow remains negative due to a significant drop of nearly 50 per cent in advertising revenue and a substantial debt burden. This falls short of Musk’s previous expectation in March that Twitter could achieve positive cash flow by June.

In response to suggestions on recapitalisation, Musk stated in a tweet, “Need to reach positive cash flow before we have the luxury of anything else.” He further mentioned on Sunday that Twitter did not experience the anticipated increase in advertising revenue in June, but he remains more optimistic about July. Additionally, Musk noted that Twitter Spaces, the audio chat feature, has not generated revenue yet and is currently incurring costs.

These developments indicate that the cost-cutting measures implemented since Musk acquired Twitter in October have not been sufficient to achieve positive cash flow, as per Reuters. It also suggests that Twitter’s advertising revenue may not have recovered as quickly as Musk previously stated in an April interview with the BBC, where he indicated that most advertisers had returned to the platform.

Despite significant employee layoffs and reductions in cloud service expenses, Musk mentioned that non-debt expenditures were reduced to $1.5 billion from the projected $4.5 billion in 2023. However, Twitter still faces substantial annual interest payments of around $1.5 billion due to the debt incurred in the $44 billion deal that took the company private.

The exact time frame Musk referred to regarding the 50 per cent drop in ad revenue remains unclear. He had previously projected Twitter’s revenue to reach $3 billion in 2023, down from $5.1 billion in 2021.

Twitter has faced criticism for lax content moderation, leading to the departure of many advertisers who did not want their ads displayed alongside inappropriate content.

Musk’s appointment of Linda Yaccarino, former ad chief at Comcast’s NBCUniversal, as CEO indicated that ad sales are a priority for Twitter, even as the company aims to boost subscription revenue. Yaccarino, who joined Twitter in early June, has emphasised plans to focus on video, creator and commerce partnerships. The company is also engaged in preliminary discussions with political and entertainment figures, payment services, and news and media publishers.

In an effort to attract more content creators, Twitter recently announced that select creators will be eligible to receive a portion of the ad revenue generated by the company.



[ad_2]

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *