Twitter revenue climbs to $1.2B, daily users rise to 229M
The social media company on Thursday reported net income of $513 million, or 61 cents a share, but that includes a big one-time gain from the sale of its MoPub business, clouding comparisons with the year-ago period.
Revenue, most of it from ads, rose 16% to $1.2 billion in the three months to March compared with the same period last year, though the company said the figure reflected “headwinds associated with the war in Ukraine,” without elaborating.
Twitter reported an average of 229 million daily active users in the quarter, which was about 14 million more than a revised 214.7 million daily users in the previous quarter. The conference call with industry analysts and executives from San Francisco was canceled. This means that there will not be any further information about the company’s financial situation.
“Given Elon Musk’s imminent acquisition of Twitter, we won’t be providing any forward-looking guidance and have withdrawn all goals and outlooks,” the company stated.
Musk, who’s paying $54. 20 for each outstanding share of Twitter, did not speak publicly on the quarterly report, perhaps among its last as a publicly traded entity.
Musk’s $44 billion deal to buy Twitter was announced earlier this week and is expected to close sometime this year. However, shareholders and regulators in the U.S. will need to weigh in before the deal can be finalized. Despite objections from some Twitter employees and users concerned about Musk’s stance regarding free speech and what that might mean for harassment or hate speech on the platform, there are not many obstacles to overcome.
Angelo Zino is a tech analyst at CFRA. He said that the board should approve Musk’s offer based on the results and a host of challenges facing digital advertising.
“We have little reason to believe that Twitter could extract more shareholder value by remaining public,” he wrote in a research note.
Still, Twitter shares have yet to reach the buyout price and on Thursday, the company’s stock rose slightly to $49.11. The gap between the deal price, current stock price seems like it indicates that some investors are still uncertain about when and if the deal will be completed. Harry Kraemer, who was a former CEO of Baxter International and is now a professor at Northwestern University’s Kellogg School of Management.
One factor that contributes to the uncertainty is the unusuality of an individual buying a multibillion dollar company.
Investors can review the financial disclosures of the buyer to determine if they have the cash needed to fund the acquisition. If necessary, the buyer can also issue shares to raise money.
“In this case, Tesla isn’t buying the company. Elon Musk is,” Kraemer stated. “Elon Musk is an individual. You can’t look at a balance sheet and see where the cash is coming from.”
Another factor is Musk’s propensity to change his mind, fueling fears he could back out of the deal, even if he has to pay a $1 billion break-up fee.
Musk is also the CEO of Tesla’s electric car company, SpaceX, and other ventures. He plans to make Twitter private. If he does, the company will no longer be beholden to shareholders or publicly report its financial results, which have been mixed at best since the company went public in 2013.
Twitter has struggled with consistent profits as a public company, while generating low revenue growth in comparison to the two dominant digital advertising platforms, Google and Facebook.
Going private could allow Twitter to be more open to new ideas while also allowing it to focus less on short-term profit and stock price. However, even the richest man in the world will want the company to succeed.
“I believe there is nothing better than Elon Musk buying Twitter and ideally replacing its board and also doubling down investments into new products and revenue-generating sources,” John Meyer told The Associated Press earlier in the week.
Barbara Ortutay reported from Oakland, California.
See all of AP’s tech coverage at https://apnews.com/hub/technology
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