Elon Musk said on Saturday that Twitter’s cash flow remains negative due to a nearly 50% drop in advertising revenue and a heavy debt burden, suggesting Twitter could reach cash flow positive by June. lower than expected in March.
“We need to achieve positive cash flow before we can afford to do anything else,” Musk said in a tweet replying to a proposal for a capital increase.
It’s the latest sign that the aggressive cost-cutting measures since Musk acquired Twitter in October won’t be enough to make Twitter cash flow positive. It suggests that Twitter’s ad revenue may not be recovering as much as it suggested in an interview in April. It was he BBC that brought most of the advertisers back to the site.
After laying off thousands of employees and cutting cloud service fees, Musk said the company had cut non-debt spending to $1.5 billion in 2023, down from $4.5 billion. rice field. Twitter also said it faces about $1.5 billion in annual interest payments as a result of debt. He undertook a $44 billion deal to take the company private.
It’s unclear what period Musk was referring to when he said the 50% drop in ad revenue. He said Twitter’s revenue is expected to fall from $5.1 billion in 2021 to $3 billion in 2023.
Twitter has been criticized for lax content control, which has since led to the exodus of many advertisers who don’t want their ads to appear next to inappropriate content.
Musk’s hiring of Linda Yaccarino, a former head of advertising at Comcast-owned NBCUniversal, as CEO means Twitter will seek to increase subscription revenue while ad sales are a priority. suggested that
Yaccarino began working at Twitter in early June, telling investors that Twitter plans to focus on video, creator and commerce partnerships, as well as early partnerships with political and entertainment figures, payment services, news and media publishers. said it was in negotiations.
Twitter announced on Thursday that it will qualify select content creators to receive a portion of the advertising revenue the company earns, with the aim of attracting more content creators to the site.
(Reporting by Jahnavi Nidumolu, Bengaluru, Editing by Grant McCool)
