New York (CNN Business) – Twitter’s battle with Elon Musk is taking a toll on his business.
The company on Friday reported revenue of $1.18 billion in the three months ending June, down 1% from a year earlier. Twitter attributed the drop in sales in part to “uncertainty” related to the pending acquisition of Musk, which is currently struggling to get out of it.
Twitter also said the sales decline was due in part to challenges to its advertising business caused by troubles in the broader economy, potentially adding to concerns about an advertiser pullout in the social media industry. .
Snapchat’s parent company reported slower-than-expected revenue growth on Thursday, which it blamed in part on recession and inflation fears slashing advertising budgets. Snap shares were down 31.5% in premarket trading on Friday.
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Investors appeared to have a more muted reaction to Twitter’s figures. Shares of Twitter were down about 2% in premarket trading on Friday following the report.
Although revenue declined, Twitter’s user base continued to grow. The company’s monetizable daily active users grew more than 16% year over year to 237.8 million during the quarter. However, Twitter posted a net loss of $270 million during the quarter, compared to $66 million in profit in the same quarter a year earlier.
The results come after a judge ruled this week that Twitter’s case against Musk would go to trial in October, a first victory for the company, which had requested an expedited procedure. Musk earlier this month sued to terminate the $44 billion acquisition deal over allegations that Twitter had breached the deal by failing to provide information related to the number of bot accounts on its platform. Twitter has fired back with a lawsuit claiming it was Musk who violated the deal and asking a court to force him to go through with it.
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Due to the pending acquisition by Musk, Twitter did not provide financial guidance for the upcoming quarter or host an earnings call with Wall Street analysts. Before the dispute between Twitter and Musk, the acquisition was expected to be completed before the end of this year.
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Twitter says ‘uncertainty’ with Elon Musk is hurting its business – KESQ