Twitter Inc, in one of its last earnings reports before Elon Musk takes the company private, reported revenue that missed analysts\u2019 estimates, reflecting a slowdown in advertising.<\/p>\n
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.<\/p>\n
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.<\/p>\n
At the same time, Twitter reported a 16% increase in daily active users, to 229 million beating estimates for 226.4 million. The stock was little changed in premarket trading, given Musk\u2019s agreement earlier this week to buy the company for $54.20 per share.<\/p>\n
Twitter has found itself the subject of much of the conversation on its own platform in recent weeks as Musk\u2019s $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 \u201cessential to a functioning democracy.\u201d<\/p>\n
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\u2019s revenue. He\u2019s on record as saying he\u2019s not in it for the money. \u201cI don\u2019t care about the economics at all,\u201d Musk said at a TED conference when the deal was announced.<\/p>\n
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\u2019s most active users, and also makes some money through a data licensing business.<\/p>\n
While Twitter\u2019s financial prospects may not be a priority for the world\u2019s richest person, Musk still has much riding on Twitter\u2019s success since he is financing $21 billion out of his own pocket. Twitter reported earnings per share of 61 cents in the first three months of the year.<\/p>\n
Reaching an agreement earlier this week was the culmination of a months-long saga that saw Musk amass 9% of Twitter\u2019s shares; launch a fusillade of criticism at Twitter\u2019s management; rebuff an invitation to join the company\u2019s board; and then announce an offer that many people first construed as a weed joke.<\/p>\n
Once the deal closers, however, Musk may no longer have to answer to Wall Street but he will have other constituents to please, including employees who keep Twitter\u2019s engines running, and users.<\/p>\n
His promise to ease content-moderation policies may be a welcome change for some people, but it has alarmed Black, Muslim, LGBTQ+ and other groups who have voiced worry about increased harassment on the platform and has caused concern among advertisers who are brand conscious and wouldn\u2019t want their ads to show up next to controversial posts.<\/p>\n
Due to the pending sale, Twitter didn\u2019t hold an analysts\u2019 call to discuss the results or issue a shareholder letter.<\/p>\n