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Twitter Inc (NYSE: TWTR) on Friday blamed its ongoing legal battle against Elon Musk and a weakening digital advertising market for a surprise fall in quarterly revenue and a net loss.
The earnings report comes as the social media platform has sued Musk for terminating his $44 billion offer to buy Twitter and is now preparing for an expedited legal showdown in a trial set to begin in October.
The deal has worried Twitter's advertisers and caused chaos inside the company.
Advertising revenue increased just 2% to $1.08 billion, missing Wall Street expectations of $1.22 billion.
Total second-quarter revenue, including income from subscriptions, was $1.18 billion, compared with $1.19 billion a year earlier.
Analysts, on average, were expecting $1.32 billion.
Twitter said it incurred a net loss of $270 million, or 35 cents per share, compared to a profit of $65.6 million, or 8 cents per share, a year earlier.
Its adjusted 8-cent loss missed expectations for a 14-cent adjusted profit.
Monetizable daily active users (DAU), a metric for users who see advertising on Twitter, grew 16% to 237.8 million but missed analyst expectations of 238.7 million.
The San Francisco-based social media company said bot and spam accounts represented fewer than 5% of users during the quarter.
The company's costs and expenses jumped 31%. Expenses related to the Musk deal totaled $33 million during the quarter and recorded $19 million in severance-related costs.
Current inflation pressures and fears of a recession have forced some advertisers to slash their marketing budgets.
Picture Credit: MarketWatch
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