Twitter on Friday reported a surprising drop in quarterly revenue, which it attributed to uncertainties surrounding Elon Musk’s acquisition of the company and a weakening digital ad market.
Shares of the social network were down 3% in the premarket. The company reported revenue of US$1.18 billion (about R$6.4 billion) in the second quarter, compared to US$1.19 billion in the same period last year.
Analysts, however, had expected revenue of US$ 1.32 billion (about R$ 7.22 billion), according to data compiled by IBES, from Refinitiv.
Twitter, which sued Musk after the billionaire announced he was exiting a $44 billion deal to buy the company, said ad revenue rose just 2% to $1.08 billion. 5.9 million).
The company’s results come after Snap, Snapchat’s parent company, announced weak results and did not release projections, citing “incredibly challenging” conditions as advertisers slashed spending.
Twitter and its tech peers, including Snap and Alphabet, saw a surge in revenue in 2021, with brands heavily raising their stakes in online advertising as they rebound from the height of the pandemic.
But inflationary pressures and fears of a recession have forced advertisers to rethink their 2022 budgets.
At the same time, TikTok and tech giant Apple are taking market share in the digital ad space, increasing competition.
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