Twitter Reports 40% YoY Drop in Revenue and Earnings in December

Twitter, the popular social media platform, reported a significant decline in both revenue and adjusted earnings for the month of December. The Wall Street Journal report on Friday revealed that the revenue and earnings of Twitter dropped by 40% YoY.

This article will discuss the reasons behind this decline, the impact of Elon Musk’s takeover of the company, and Twitter’s response to this report.

The Effect of Elon Musk’s Takeover on Twitter’s Revenue

Elon Musk, the famous billionaire entrepreneur, took over as the CEO of Twitter in October 2021. Since then, several advertisers have reduced their advertising spend on the platform. According to the data from Standard Media Index, advertising spend on Twitter dropped by 71% in December 2021 alone. This sharp decline resulted in Twitter’s revenue and adjusted earnings to fall by 40% YoY in December.


Twitter’s Response to the Report

Twitter has not yet responded to a request for comment regarding the decline in revenue and earnings in December. However, Elon Musk had warned in November about the possibility of the social media platform going bankrupt. In December, he also stated that Twitter was on track to be “roughly cash flow break-even” in 2023. This means that the company will not generate any negative cash flow by 2023 and will be able to fund its ongoing operations.

Twitter’s Interest Payment on Loan

In January, Twitter made its first interest payment on a loan that banks provided to help finance Elon Musk’s purchase of the social media company last year. The loan was taken out to fund Musk’s $44 billion acquisition of Twitter in November 2020. This interest payment is a significant expense for the company, which is already facing a decline in revenue and earnings.


FAQs

Why did Twitter’s revenue and earnings drop by 40% YoY in December?

The revenue and earnings of Twitter dropped significantly in December due to several advertisers cutting their spending on the platform after Elon Musk took over as the CEO of the company in October 2021.

How much did advertising spend on Twitter drop in December 2021?

According to the data from advertising research firm Standard Media Index, advertising spend on Twitter dropped by 71% in December 2021.

Did Twitter respond to the report of the decline in revenue and earnings in December?

Twitter did not immediately respond to a request for comment from Reuters regarding the decline in revenue and earnings in December.

What did Elon Musk say about Twitter’s financial status in December 2021?

In December 2021, Elon Musk stated that Twitter was on track to be “roughly cash flow break-even” in 2023.

Why did Twitter take out a loan from banks?

Twitter took out a loan from banks to help finance Elon Musk’s purchase of the social media company in November 2020.


Twitter Inc. reported a significant decline of about 40% YoY in both revenue and adjusted earnings for the month of December due to several advertisers cutting their spending on the platform. Elon Musk’s takeover of the company in October 2021 has also had a negative impact on Twitter’s revenue. While Musk has stated that Twitter is on track to be “roughly cash flow break-even” in 2023, the company’s future remains uncertain. As Twitter continues to face challenges and changes under Musk’s leadership, it remains to be seen how the social media platform will fare in the future.