The official profile of Elon Musk on the Twitter social network.
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Twitter reported second-quarter earnings on Friday that missed analysts’ estimates for earnings, revenue and user growth.
Twitter shares fell more than 1% in early trading.
Here are the key numbers:
- Earnings per share: A loss of 8 cents, adjusted, versus expected earnings of 14 cents, according to a survey of analysts by Refinitiv
- Revenue: $1.18 billion vs. $1.32 billion
- Monetizable Daily Active Users (mDAU): 237.8 million vs. 238.08 million expected, according to Refinitiv
Twitter said revenue fell 1% year over year to $1.18 billion. Wall Street had expected $1.32 billion, representing 10.5% year-over-year growth. It marked Twitter’s biggest revenue loss, with results 11% below estimates, according to Refinitiv.
The company partially blamed the revenue decline on ad industry headwinds tied to the broader challenging macroeconomic environment, as well as “uncertainty related to the pending acquisition of Twitter by a subsidiary Elon Musk”.
Twitter and other social media companies with a heavy reliance on advertising have felt the brunt of macroeconomic challenges, as fears about inflation, interest rate issues, continued supply chain problems and the war on Ukraine caused some advertisers and brands to adjust their ad spending. On Thursday, Snap reported disappointing second-quarter results and said it plans to slow hiring due to weakening revenue growth, sending its shares down 25% in extended trading.
In light of Musk’s pending acquisition, Twitter said it will not provide forward-looking guidance for the third quarter. Nor does it host a conference call with analysts to discuss earnings results.
Costs and expenses during the quarter rose 31% year-over-year to $1.52 billion. The company suffered a loss of 8 cents per share, reporting its first adjusted loss in two years and the second in its history.
Twitter said Musk’s acquisition-related costs were approximately $33 million in the second quarter. Costs related to layoffs were approximately $19 million in the second quarter. Earlier this month, Twitter laid off a third of its talent acquisition team, according to the Wall Street Journal.
Twitter is locked in a legal battle with Musk over his proposed $44 billion takeover of the company. Tesla’s CEO has tried to back out of the deal. Musk claims that Twitter did not report the number of spam and fraud accounts and did not provide information about fake accounts. Twitter sued Musk and some of his associates earlier this month over allegations that the billionaire “refuses to fulfill his obligations to Twitter and its shareholders because the agreement he signed no longer serves his personal interests.”
Twitter scored an early victory Tuesday when a Delaware Court of Chancery chancellor ruled in favor of an expedited five-day trial that will begin in October.
CNBC’s Robert Hum contributed to this report.
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