Twitter Reports Higher Revenue, Users Like Elon Musk Prepare To Buy It 2022-04-28 07:34:00

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The improved results may make little sense as Mr. Musk expects them to do so Changes to Twitter’s business model and its messaging platform once the $44 billion deal is completed. Billionaire has floated including moves Relying less on advertising To generate revenue and ease content moderation rules that can affect ad placement and user experience.

Twitter said Thursday that it is withdrawing all previously submitted goals and expectations, and will not provide any forward-looking guidance. Before courting Mr. Musk, Twitter was working toward three main goals by the end of 2023: to surpass $7.5 billion in annual revenue, reach 315 million daily users, and double the pace at which it produces new technology.

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Because of its pending sale to Mr. Musk, announced MondayTwitter said it would not host a conference call with analysts to discuss the findings.

At an all-employee meeting late Monday, CEO Parag Agrawal said no layoffs were planned and that the company’s priorities were not changing before the deal closed, according to a person who heard the notes.

In what may be one of its final earnings reports as a public company, Twitter said its daily user base rose to 229 million from 214.7 million in the quarter ending in December. Analysts polled by FactSet expected the number of users to reach about 226 million.

Twitter said Thursday that it overestimated its user base for nearly three years to the end of 2021 due to an error in how people linked to multiple accounts are counted. The company provided restated numbers, including lowering the December quarter number to 214.7 million from 217 million.

Twitter will go private if Elon Musk’s $44 billion takeover offer is approved. This step will allow Mask to make changes to the site. Dan Gallagher of the Wall Street Journal explains the changes Musk has proposed and the challenges he might face when activating them. Illustration: Jordan Crans

Twitter shares rose 0.6 percent to $48.94 after the results were announced. Mr. Musk’s bid is estimated at $54.20 per share.

Twitter’s revenue rose to $1.2 billion in the first quarter from $1.04 billion a year earlier. Analysts expected revenue of $1.23 billion, according to FactSet. Twitter noted the headwinds associated with the war in Ukraine.

Advertising revenue increased 23% to $1.11 billion. results are coming Her social media peers Like

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and Meta Platform Inc.’s

Facebook

opinion Their ad sales are down by

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New privacy rules.

Twitter announced $513 million in profit, including A pretax gain of $970 million from the sale From mobile advertising company MoPub to AppLovin Corp.

Twitter said expenses for the quarter increased 35% and led to an operating loss of $128 million, compared to operating income of $52 million in the prior year quarter.

Mr. Musk’s Twitter DealFinanced with bank debt and cash Promised by the billionaire himself – raises questions about the financial basis of the social media company. The deal could nearly triple its leverage and Saddle it with hundreds of millions of dollars in interest Payable on more than $25 billion used to finance the leveraged purchase.

S&P Global Ratings said Tuesday it expects Twitter’s significant increase in leverage will lower the company’s multi-point credit rating, which currently stands at BB+, or below investment grade.

To service the debt, Mr. Musk will need to maintain and grow Twitter’s cash flow, which would be difficult without ads. Mr. Musk has proposed changes to the company that include less reliance on advertising. Ads currently represent about 90% of Twitter’s revenue.

Twitter introduced Twitter Blue, its first consumer subscription offering, to the US market in November. Mr. Agrawal said on Twitter’s last earnings call in February that Blue was appealing to the company’s “most intense users”, but it was not critical to achieving its 2023 revenue target at the time.

Mr. Musk, should he take over the management of the company, will face other challenges in the future. He has vowed to adopt a hands-off approach to moderate rhetoric on Twitter, saying in a tweet Monday that he wants the platform to be that way. A destination for widespread discourse and controversy. On Tuesday, the EU’s internal market commissioner warned that he would need to follow the bloc’s new rules on modifying content.

write to Sarah E. Needleman in sarah.needleman@wsj.com

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