Twitters cash flow remained negative due to a 50 drop

Twitter’s cash flow remained negative due to a 50% drop in advertising revenue

Twitter’s cash flow remains negative due to a nearly 50 percent drop in advertising revenue and a high debt burden, Elon Musk said on Saturday, falling short of earlier expectations that Twitter could reach positive cash flow by June this year.

    Image Source: Geralt / Pixabay

Image Source: Geralt / Pixabay

We need to be cash flow positive before we can afford anything else.‘ Musk tweeted, responding to recapitalization proposals.

It’s another signal that the aggressive cost-cutting measures taken after Musk acquired Twitter in October weren’t enough to bring the company to positive cash-flow levels. It also points to the possibility of a slow recovery in Twitter ad revenue, which is contrary to Musk’s expectations, which he expressed in an interview with the BBC in April. At the time, Musk said most advertisers had already returned to Twitter.

After laying off thousands of employees and cutting spending on cloud services, Musk said the company has reduced its debt-free spending to $1.5 billion from an expected $4.5 billion in 2023. Additionally, annual interest payments on Twitter’s debt are approximately $1.5 billion.

It remains unclear to what period of time Musk attributes the 50 percent drop in advertising revenue to. Twitter will generate $3 billion in revenue in 2023, up from $5.1 billion in 2021, he said. Twitter has been criticized for inefficient content moderation in the past, leading to a churn of advertisers who didn’t want their ads to be seen alongside inappropriate content.

The appointment of Linda Yaccarino, former head of advertising at NBCUniversal, as Twitter’s CEO underscores the company’s priority of selling ads to drive subscription revenue. Iaccarino joined Twitter in early June and told investors that Twitter plans to focus on video, collaborations with content creators and commerce, and is already in talks with politicians and entertainment giants, payment services, news publishers and the media.

Despite Musk’s notable efforts to cut costs and improve Twitter’s financial position, these measures have not yet yielded the expected results. Declining advertising revenues coupled with a significant debt burden continue to put pressure on the company’s financial performance. At the same time, the appointment of a new CEO underscores Twitter’s commitment to strengthening its advertising strategy and expanding its revenue streams. This could be an indicator of a possible change in Twitter’s business model in the near future.

About the author

Robbie Elmers

Robbie Elmers is a staff writer for Tech News Space, covering software, applications and services.

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