Highlight Points:
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Twitter’s cash flow is still negative.
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Ad revenue fell by 27% year-over-year.
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Twitter has $4.5 billion in long-term debt.
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Monthly active users grew by just 11% year-over-year.
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Musk wants to make Twitter more profitable.
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Musk wants to improve Twitter’s user experience.
According to Elon Musk, Twitter’s cash flow is still negative because of a 50% decline in advertising revenues and a high debt load. In a tweet posted on Sunday, the CEO of Tesla and the new owner of Twitter stated that before moving on with further plans, the business must achieve positive cash flow.
Musk did not define the time period during which Twitter’s ad revenue fell by 50%. The company’s financial statistics for the first quarter of 2023, however, revealed a 27% year-over-year decline in ad revenue.
Another significant issue is Twitter’s debt burden. As of March 31, 2023, the corporation owed $4.5 billion in long-term debt. This debt load is partly attributable to Twitter’s 2012 purchase of the video platform Vine.
Musk’s remarks regarding Twitter’s cash flow issues come while the firm is dealing with a number of issues. Twitter is struggling with a decrease in user growth in addition to the decline in ad revenue and high debt load.
In the first quarter of 2023, the company’s monthly active users (MAUs) increased by barely 11% year over year. This is Twitter’s slowest rate of growth ever.
Until now, Musk has kept his Twitter strategy a secret. He has, however, stated that he intends to increase the company’s profitability and enhance the user experience. Whether Musk will be able to save Twitter is yet to be seen. But his remarks regarding the company’s cash flow issues imply that he is aware of the difficulties Twitter faces.