Twitter-owner Elon Musk says the company is still losing money because advertising revenue is down 50 percent.
“We’re still negative cash flow, due to ~50% drop in advertising revenue plus heavy debt load. Need to reach positive cash flow before we have the luxury of anything else,” Musk wrote in a tweet on Saturday.
In another tweet yesterday, Musk said that Twitter “did not see the increase in advertising revenue that was expected in June,” but that July is looking “a bit more promising.”
Musk gave a much more optimistic update on cash flow and advertisers in an interview with the BBC three months ago. At that time, he said Twitter was close to being profitable and that advertisers who left after his acquisition were returning.
“We could be profitable, or to be more precise, cash flow positive this quarter if things keep going well. I think almost all advertisers have come back or said they are going to come back,” Musk said in April.
Musk also claimed in February that he saved Twitter from bankruptcy, but it still has plenty of financial problems. The “heavy debt load” Musk mentioned on Saturday was caused by the $13 billion of debt he used to fund his October 2022 purchase of the company, resulting in interest payments estimated at $1.5 billion a year.
Twitter no longer reports revenue publicly because Musk took the company private when he bought it. Musk’s latest update didn’t include specific revenue numbers, but it seems to indicate that things haven’t gotten any better in recent months and may have gotten worse.
A previous report said that Twitter’s revenue and adjusted earnings fell about 40 percent year over year in December 2022. Many advertisers bailed on the platform after Musk bought it because of changes to content moderation.
Cost cuts, unpaid bills, and rate limits
Musk has cut costs by getting rid of most of Twitter’s staff—and apparently by refusing to pay bills. Twitter has been hit with more than 20 lawsuits over allegedly unpaid bills for rent and various services, plus lawsuits from ex-employees and executives over unpaid severance, bonuses, and unpaid reimbursements. Another problem is competition from Meta’s new Threads service.
Musk also annoyed Twitter users a couple of weeks ago by capping the number of tweets they can view each day. Musk blamed data scrapers for making the limits necessary by flooding Twitter with traffic and sued four of the alleged scrapers in a Texas court.
The rate caps initially limited paying users to viewing 6,000 posts a day, while non-subscribers were limited to viewing either 600 or 300 posts per day, depending on how old their account was. The caps were raised to 10,000, 1,000, and 500 shortly after.
The rate limits still haven’t been completely lifted. On Saturday, Musk said the rate limit was raised again by 50 percent, but only for people who buy the Twitter Blue subscription.