Twitter Cash Flow Still Negative Because of 50 Percent Drop in Ad Revenue, Heavy Debt: Elon Musk
Musk's hiring of Linda Yaccarino signalled that ad sales are a priority for Twitter even as it works to increase subscription revenue
- Yaccarino started working at Twitter in early June as CEO
- Yaccarino was former ad chief at Comcast's NBCUniversal
- Twitter has been criticized over lax content moderation
Twitter's cash flow remains negative because of a nearly 50 percent drop in advertising revenue and a heavy debt load, Elon Musk said on Saturday, falling short of his expectation in March that Twitter could reach 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
This is the latest sign that the aggressive cost-cutting measures since Musk acquired Twitter in October alone are not enough to get Twitter to cash flow positive, and suggests Twitter's ad revenue may have not recovered as fast as Musk suggested in an interview in April with the BBC that most advertisers had returned to the site.
After laying off thousands of employees and cutting cloud service bills, Musk had said the company reduced its non-debt expenditures to $1.5 billion (roughly Rs. 12,300 crore) from a projected $4.5 billion (roughly Rs. 37,000 crore) in 2023. Twitter also faces annual interest payments of about $1.5 billion (roughly Rs. 12,300 crore) as a result of the debt it took on in the $44 billion (roughly Rs. 3,61,400 crore) deal that turned the company
It is unclear what time frame Musk was referring to by the 50 percent drop in ad revenue. He has said Twitter was on track to post $3 billion (roughly Rs. 24,600 crore) in revenue in 2023, down from $5.1 billion (roughly Rs. 41,900 crore) in 2021.
Twitter has been criticized over lax content moderation, followed by an exodus of many advertisers who did not want their ads appearing next to inappropriate content