Twitter Q2 Earnings Shock... Revenue Falls Far Short of Estimates, Turns to Loss

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Twitter, which has been in turmoil following Elon Musk, Tesla CEO's declaration to cancel the acquisition, recorded an earnings shock in the second quarter.

Twitter announced on the 22nd (local time) that its revenue for the second quarter of this year was $1.18 billion (approximately 1.5476 trillion KRW), a 1% decrease compared to the same period last year. This falls significantly short of the market consensus average of $1.32 billion. The economic media CNBC reported, "Revenue came in 11% below Wall Street consensus," adding, "This is the largest margin ever by which earnings have fallen short of expectations."

In particular, advertising revenue, which accounts for most of the revenue, was $1.08 billion (approximately 1.41 trillion KRW), up only 2% from a year ago. This is a noticeably poor performance compared to the 23% growth rate in the first quarter of this year.

Twitter, which earned a net profit of $65.6 million a year ago, recorded a net loss of $270 million in the second quarter of this year, returning to the red. The net loss per share was $0.35. The market had initially expected a net profit per share of $0.14.

Twitter cited the downturn in the advertising industry related to the macroeconomy and uncertainties related to the Twitter acquisition as the reasons for the poor performance. CEO Musk agreed to acquire Twitter for $44 billion in April but declared the cancellation of the contract earlier this month.

Twitter's daily active users in the second quarter were 237.8 million, slightly up from 229 million in the previous quarter.

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