Twitter reports quarterly loss, cites Musk buyout uncertainty

Twitter has reported a quarterly loss as revenue slipped even as its number of users climbed.

The social media company's quarterly earnings figures released on Friday offered a glimpse into how the social media business has performed during a months-long negotiation with billionaire and Tesla CEO Elon Musk over whether he will take over the company. 

The company lost $270 million in the April-June period after revenue slipped one percent to $1.18 billion, reflecting advertising industry headwinds, as well as uncertainty" over Musk's acquisition bid.

The number of daily active users rose 16.6 percent to 237.8 million compared with the same period a year before.

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Twitter chalked up the gains to “ongoing product improvements and global conversation around current events."

Overshadowing Twitter’s latest sales results is its legal fight with Musk to make good on his April promise to buy the company for $44 billion. 

Twitter last week sued Musk to complete the deal and both sides are bracing for an October courtroom trial to resolve the dispute.

Given the pending acquisition, Twitter said it wouldn't hold its usual quarterly earnings conference call or issue a shareholder letter.

Losing money

Twitter is left with anxious employees, wary advertisers and hamstrung management as it limps along while waiting to learn how the saga will end.

In early May, at an annual marketing event where companies negotiate large advertising deals, Twitter was "not able to give advertisers any clarity or confidence" that it would continue to be safe showcase for them, said Angelo Carusone, president of watchdog group Media Matters.

"They didn't go anywhere close to what they normally sell at that event. And it's obviously been sluggish since then," he told AFP previously.

The San Francisco-based social network cannot afford to lose customers.

Unlike big fish such as Google and Facebook parent Meta, which dominate online advertising and make billions in profits, Twitter lost hundreds of millions of dollars in 2020 and 2021.

The group will capture less than one percent of global ad revenue in 2022, according to eMarketer, compared to 1 2.5 percent for Facebook, 9 percent for Instagram and nearly two percent for booming upstart TikTok.

On top of that, Twitter's user base is barely expected to grow and may even shrink in the United States, analysts have noted.

READ MORE: Twitter shares slide after Musk's $44B dollar deal falls apart