Twitter’s revenue plunged by 35% in the fourth quarter of 2022 as top advertisers fled the social media platform following Elon Musk’s takeover, according to a report Wednesday.
In a staff meeting, Twitter global sales and marketing boss Chris Riedy said the company had generated revenue of $1.025 billion over the three-month span – or just 72% of its internal goal for the quarter, The Information reported.
Riedy told staffers that Twitter has set a goal of hitting $732 million in revenue for the first quarter of this year. That sum would mark a 39% decline from the same period one year ago.
Riedy acknowledged Twitter’s revenue had been running at 98% of its internal projections prior to Musk’s takeover on Oct. 28 – a sign that some of his initiatives have cut into expected revenue.
The dire forecast came just one day after Siddharth Rao, a senior engineering manager at Twitter, warned in a separate meeting that the company’s daily revenue had fallen by 40% compared to one year ago.
Rao revealed that more than 500 of Twitter’s key advertisers have paused their spending on the platform since Musk bought the company in October, according to The Information. At present, advertising dollars comprise the vast bulk of Twitter’s revenue.
The billionaire has rankled corporate America by making sweeping changes to Twitter’s account verification and content moderation practices and by reinstating suspended pages, such as one belonging to former President Donald Trump.
The ad revenue crisis could mean trouble for Musk, who has embarked on a major cost-cutting push at Twitter since buying the company for $44 billion.
Earlier this month, The Post reported that the big banks and investors who helped Musk acquire Twitter have already seen the value of their equity stakes and loans plunge due to the company’s financial struggles.
Twitter did not immediately return a request for comment. Musk fired the company’s entire communications department in November.
A 40% reduction in revenue would put Twitter on track for first quarter revenue of about $720 million in the first quarter of this year, down from $1.2 billion in the same period one year earlier and below the $732 million goal mentioned by Riedy.
The crunch is unfolding as Musk preps to pay the first bill on the debt he accrued to buy Twitter — with the first interest payment due as soon as this month, the Financial Times reported earlier this week.
Even before the advertiser exodus, Twitter reported a loss of $221 million on annual revenue of $5 billion in 2021, the last year for which full financial statements are available. Musk took the company private after closing his acquisition.
Musk has scrambled to make Twitter less reliant on ad revenue in recent months due to growing pushback from advertisers.
His efforts include a controversial overhaul of the “Twitter Blue” subscription service, where users can pay an $8 monthly fee for a blue check mark, priority placement in search results and other features.
Under Musk’s leadership, Twitter has missed or delayed payments on some of its offices and significantly cut back on office perks. Twitter employees have reportedly resorted to bringing their own toilet paper to the company’s San Francisco headquarters due to cuts to the janitorial staff.
Musk has been open about Twitter’s dire financial outlook, warning employees in November that the company could be forced to file for bankruptcy if it is unable to stabilize its balance sheet.
Still, Musk struck a tone of optimism in a post on Tuesday, sharing a link to an Axios report detailing how “more than three dozen news outlets, media companies and sports leagues” have reached content sponsorship deals with Twitter this year.