Twitter Reports Revenue Growth as Elon Musk Prepares to Take Over


SAN FRANCISCO — Days earlier than Elon Musk struck a deal to purchase Twitter for $44 billion, he stated he didn’t “care in regards to the economics” of the corporate. Because the world’s richest man, with a internet price of greater than $250 billion, he indicated that getting cash from the social media service was removed from his prime goal.

However on Thursday, Mr. Musk was in a position to get an up-close take a look at the power of the enterprise he’s shopping for.

Twitter reported that its income was $1.2 billion for the primary three months of the 12 months, up 16 % from a 12 months earlier however decrease than a 20 % development fee the corporate had predicted for the 12 months. Revenue was $513 million, or about 61 cents per share. Wall Avenue analysts had anticipated about $1.2 billion in income.

The social media firm stated it had 229 million each day energetic customers, up almost 16 % from a 12 months earlier.

Mr. Musk’s deal for Twitter is anticipated to shut within the subsequent three to 6 months. Mr. Musk, 50, who additionally leads the electrical carmaker Tesla and the rocket firm SpaceX, has vowed to take Twitter personal and make it a haven for “free speech.” In current days, he has criticized a few of Twitter’s prime executives who helped construct up the corporate’s insurance policies on what speech ought to be allowed on the platform and what mustn’t, inflicting an uproar.

However even when Mr. Musk says he doesn’t care about Twitter’s enterprise, buyers might be scrutinizing the corporate’s financials to see the way it might have an effect on the deal. Buyers might be a specific earnings metric of Twitter’s — its earnings earlier than curiosity, taxes, depreciation and amortization, or EBITDA, used extensively as a proxy for money move — to gauge whether or not the corporate can repay the debt and curiosity that Mr. Musk’s deal will add to its stability sheet.

Mr. Musk is funding his acquisition of Twitter with $13 billion in debt financing and $12.5 billion in loans in opposition to his inventory in Tesla. He’s anticipated so as to add about $21 billion in fairness financing.

Twitter executives have confronted questions through the years in regards to the prospects for the corporate’s enterprise, which depends totally on digital promoting. That enterprise has been inconsistent. Twitter has not turned a revenue for eight of the final 10 years. In 2020, the activist funding agency Elliott Administration took a stake in Twitter and known as for Jack Dorsey, certainly one of its founders, to resign as chief govt. Mr. Dorsey stepped down final 12 months.

“Whereas Twitter has had a rebound in advert development, its advert enterprise is considerably smaller than that of different main digital gamers,” stated Jasmine Engberg, an analyst at Insider Intelligence. “It additionally continues to have hassle bringing in new customers, which is integral to rising advert income.”

Earlier than Mr. Musk turned concerned, Twitter’s executives set an aggressive trajectory for the corporate. The plan is for it to develop quickly over the subsequent two years, reaching 315 million each day energetic customers and $7.5 billion in annual income by the tip of 2023.

Twitter didn’t present steerage for its future monetary efficiency on Thursday.

Mr. Musk’s acquisition may give Twitter the flexibility to make adjustments to its product as a personal firm, avoiding the scrutiny of Wall Avenue. Shut watchers of the corporate have lengthy famous Twitter’s hesitance to overtake its service due to protests from customers and advertiser sensitivity to drastic adjustments.

However Mr. Musk can also throw the corporate into extra turmoil. Aside from his focusing on Twitter’s govt via the service, some customers have left the platform over the prospect of a Musk-led Twitter. Inside the corporate, some staff have additionally expressed issues as to what adjustments Mr. Musk has in retailer for the service.

In an organization assembly on Monday, Parag Agrawal, the chief govt, acknowledged the uncertainty forward. “As soon as the deal closes, we don’t know what course this firm will go in,” he advised Twitter’s staff.

Anupreeta Das contributed reporting.



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