Twitter Revenue Falls 50% As Meta’s Threads Flourishes

Twitter’s cash flow is negative as a result of a roughly 50% reduction in advertising revenue and a significant debt load.

On Saturday, July 15, Elon Musk stated that the app had fallen short of his expectations in March and that he thought Twitter would be cash flow positive by June.

“Need to reach positive cash flow before we have the luxury of anything else,” Musk said in a tweet replying to suggestions on recapitalization.

His statement comes as competition between the platform—which has lately begun to pay creators for advertisements—and Mark Zuckerberg’s rival Threads continues to heat up.

This is the latest indication that Musk’s aggressive cost-cutting tactics since acquiring Twitter in October are insufficient to restore Twitter to cash flow positive, and it shows that Twitter’s ad income may not have rebounded as quickly as Musk predicted in an April interview.

Read Also: Twitter Threatens To Sue Meta For Its Threads Platform

Musk stated that the business decreased its non-debt expenses to $1.5 billion from a predicted $4.5 billion in 2023 after laying off thousands of staff and slashing cloud service bills. Twitter now faces annual interest payments of approximately $1.5 billion as a result of the $44 billion purchase that took the firm private.

The time span Musk was referring to by the 50% decline in ad revenue is unknown. He stated that Twitter was on course to generate $3 billion in revenue in 2023, a decrease from $5.1 billion in 2021.

Twitter has been chastised for poor content management, prompting several advertisers to leave because they did not want their ads to appear next to harmful information.

Musk’s employment of Linda Yaccarino indicated that Twitter prioritizes ad sales while working to enhance subscription revenue.

Despite interest from certain advertising organizations, Twitter’s rival Threads is not even running advertisements on its platform and thus is not competing with Twitter for revenue as of press time.

As of Monday morning, Threads had 100 million users, making it the fastest-growing platform in history. Threads also had the most successful app launch in the recent decade, according to Sensor Tower, with more than 40 million downloads on July 6.

In an effort to attract more content creators to the site, Twitter said on Thursday that select content creators will be eligible to receive a portion of the company’s ad revenue.

This week, the network began compensating content creators for uploading adverts, with some users reporting payouts of more than $10,000.