Twitter posted what could be one of its last quarterly earnings reports as a public company on Thursday, days after agreeing to buy out billionaire Elon Musk’s offer.
Although the number of Twitter users increased, the company’s financial results did not live up to expectations. Some analysts have speculated that the Twitter board wants to seal Musk’s sale before posting weak profits.
The social media company said first-quarter revenue was $ 1.2 billion, a 16 percent increase from last year, but less than the $ 1.23 billion that Wall Street analysts had expected.
San Francisco-based Twitter reported an average of 229 million active users daily during the quarter, up 16 percent from last year.
Twitter posted what could be one of its latest quarterly earnings reports on Thursday, a day after agreeing to sell it to billionaire Elon Musk
Musk’s $ 44 billion deal to buy Twitter was announced earlier this week and is expected to close later this year.
Twitter has canceled the conference call with executives and industry analysts that usually accompanies its results, so there will be no further information on the company’s current financial condition.
“Given the upcoming acquisition of Twitter by Elon Musk, we will not provide guidance for the future and withdraw all previously provided goals and prospects,” the company said in a statement.
Shares of Twitter rose less than 1% in pre-market trading to $ 48.81. Musk has agreed to buy the company for $ 54.20 a share, and the share price is currently dictated by investors’ views on how likely the deal is to close.
The results of the profits set out Musk’s challenges in improving the social media platform’s business to match its influence on news and culture.
Twitter has long been criticized for its slow pace of product launches. Musk tweeted suggestions, ranging from launching a widely sought-after edit button to turning the algorithm into open source Twitter.
When Musk concludes the deal, he will monitor a company that has had years of struggling with internal dysfunction, indecision and lack of accountability, Reuters reported earlier, according to eight current and former Twitter employees.
Daily active Twitter users rose to 229 million in the first quarter ended March 31, from 199 million a year earlier. The figure exceeded analysts’ expectations of 226.8 million active users per day.
Facebook owner Meta Platforms also reported a return to consumer growth on Wednesday, which helped boost social media shares.
Twitter said an internal error led to an overstatement of the company’s quarterly user numbers by about 1.5 million between the fourth quarter of 2020 to the end of 2021. The company said it also overestimated the figures in 2019, but did not is able to provide data.
Given the upcoming acquisition, Twitter said it would not provide any future-oriented guidance and withdrew all previous goals and prospects. The company announced last year that it aims to double annual revenue and grow to 315 million users by 2023, as former CEO Jack Dorsey aimed to signal a reversal of years of product stagnation.
Total revenue in the first quarter was $ 1.2 billion, compared to analysts’ average estimates of $ 1.23 billion, according to IBES from Refinitiv.
The price of the shares on Twitter has been visible since the beginning of the year. Musk plans to pay $ 54.20 a share to acquire the company and make it public sometime this year
The company earns most of its revenue from selling digital ads on the website and application. Twitter stopped ads in Ukraine and Russia in February amid an ongoing invasion that the Kremlin called a “special military operation.”
“The macro environment is becoming hostile as advertisers limit their spending while tackling inflation, which has been at its highest level in four decades,” said Harris Anwar, a senior analyst at Investing.com.
Musk said Twitter should not serve advertising, which would allow the platform to have more control over its content policies. Advertisers generally prefer strong content moderation to prevent their brand from appearing in inappropriate content.
Its net income rose to $ 513.3 million, or 61 cents a share, from $ 68 million, 8 cents a share, a year earlier.
An evolving story follows.
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