Twitter’s cash flow is still negative because of a 50% drop in the company’s advertising revenue as well as its ‘’heavy debt load’’, Elon Musk announced on Saturday.
“Need to reach positive cash flow before we have the luxury of anything else,” Musk said in response to a Twitter user who shared a business advice.
In March, the billionaire said that the social media company had ‘’a shot’’ at becoming cash flow positive in the second quarter of 2023.
Replying to another tweet, Musk said that his company ‘’did not see the increase in advertising revenue that was expected in June’’, but added that ‘’July is a bit more promising.’’
Musk has announced many controversial changes to Twitter’s business since he acquired it for $44 billion in October last year, such as laying off the majority of the company’s workforce, and launching the Twitter Blue plan, which has replaced its previous legacy verification program.
In January, The Information reported that Twitter lost more than 500 of its top advertisers since Musk’s acquisition, due to concerns over the platform’s content moderation.
To gain them back, Twitter offered various ad incentives, and eased its ad policies by allowing cannabis ads in certain U.S. states and lifting its long-standing ban on political ads on the platform.
According to an internal presentation reported by the New York Times, Twitter’s U.S. advertising revenue declined 59% YoY between April 1st and the first week of May.
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While Musk said last month that Twitter is regaining almost all of the advertisers it lost following the acquisition, his latest statements confirm that the company’s ad revenue has yet to start bouncing back.
Despite the drop, Twitter last week started sharing its advertising revenue with select creators on the platform.