Twitter reported disappointing earnings on Friday after missing analyst projections on revenue and daily active users.
It had been expected that the company would earn $1.32 billion and reach 238 million daily active users. However, it did not reach these expected numbers.
“It marked Twitter’s biggest revenue miss ever, with results coming in 11% below estimates,” a CNBC article said, quoting Refinitiv.
The company explained what went wrong, saying that the overall drop in ad revenue affected its revenue and the ‘uncertainty’ surrounding the Elon Musk takeover bid.
Recently, the $44 billion Twitter takeover that many expected to be a straightforward acquisition has taken several turns and twists. The latest is the lawsuit that the legal showdown where the company is attempting to force the deal’s completion.
On the other hand, Musk is doing all he can to either back out of the purchase or bring down Twitter’s valuation. He argues that when he made the initial offer, he was unaware of just how many fake accounts the platform had.
Besides the ongoing drama, companies in the ad industry have been seeing losses, with Snap posting a revenue drop the same day as the Dorsey-founded company. The ad industry’s economic challenges are forcing several social media platforms to start exploring other revenue streams.
Paid subscriptions and hardware are the two common alternatives that we have been seeing so far.
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