What just happened? In addition to suing Elon Musk, Twitter is also blaming the world's richest man for its falling revenue. The platform saw its number of users increase in the second quarter of the year, but that hasn't translated to a healthier bottom line, something it partly blames on the disruption caused by Musk bidding for the company before walking away.
Twitter's Q2 2022 results show its second-quarter revenue was $1.18 billion, representing both a quarterly and yearly decline, albeit only slightly. However, its average monetizable daily active users (mDAUs) was up 16.6% compared to Q2 2021, reaching 237.8 million globally.
$1.18 billion is no small sum, but Twitter's costs and expenses for the quarter totaled $1.52 billion, an increase of 31% year-over-year. It reported net losses of $270 million, $33 million of which was related to the "pending acquisition" of the company. Q2 2021 saw a net profit of $66 million.
Twitter says the fall in yearly revenue was down to several factors, including the uncertainty surrounding the company as a result of Musk's bid—the situation has made Twitter a less attractive prospect to advertisers. It also pointed to the economic downturn and an advertising industry shaken by Apple limiting the scope of user tracking last year, the same reasons cited by Snap for its weaker than expected second-quarter results. Ad sales did rise, by just 2%, but it wasn't enough.
Twitter said it would not host an earnings conference call, issue a shareholder letter, or provide financial guidance given the Musk situation.
The saga of Musk's attempt to buy Twitter ended earlier this month over the long-running issue of how many fake accounts populate the site. The company quickly launched a lawsuit hoping to force the Tesla boss to either complete the deal or pay what would be a very large amount of money.
Many believe the law is likely be on Twitter's side in this case, and that prediction proved accurate this week when a judge granted Twitter's request for a fast-tracked trial (five days) that will take place this year (October) instead of next.