Elon Musk Says Twitter’s Ad Revenue is Down 50% and Cash Flow is Negative
Elon Musk, the billionaire owner of Twitter, has revealed via Twitter that the platform is still facing financial challenges due to a 50% drop in advertising revenue and a “heavy debt load,” resulting in negative cash flow.
In response to a follower’s business advice, Musk tweeted, “Need to reach positive cash flow before we have the luxury of anything else.” This tweet contrasts with his statement in April when he mentioned that the platform was “roughly breaking even” and most advertisers had returned.
Since Musk took over Twitter, ad revenue has been a contentious issue, causing many advertisers to leave the platform. Concerns about content moderation, mass layoffs, and uncertainty surrounding Twitter’s future led to the exodus.
Linda Yaccarino, a former NBCUniversal marketing executive, recently assumed the CEO position at Twitter, and Musk likely hopes her advertising experience will help attract advertisers back to the platform.
According to an internal presentation cited by The New York Times (CNN has not viewed the presentation), Twitter’s US advertising revenue from April 1 to the first week of May was down 59% year-over-year. Sensor Tower, a market intelligence firm, provided data to CNN last month, indicating that only 43% of Twitter’s top 1,000 advertisers as of September, before Musk’s takeover, were still advertising on the platform in April.
During a Twitter Spaces livestream event hosted by Musk and Robert F. Kennedy Jr. last month, Musk acknowledged the challenges faced by Twitter, stating, “Basically, our revenue is cut in half because we didn’t toe the line.” He described it as a “huge struggle for Twitter to break even.”
Twitter is now facing increased pressure with the rapid success of Meta’s Threads, a rival app that surpassed 100 million downloads within a week of its launch.
To address the financial situation, Twitter has implemented various cost-cutting measures and revenue-generating initiatives. These include providing blue checkmarks to Twitter Blue members and putting Tweetdeck behind a paywall.
Recently, Twitter announced that content creators would be able to earn a share of the platform’s ad revenue, likely aiming to attract more creators. To qualify for this program, creators must have Twitter Blue and achieve at least 5 million impressions on their posts in each of the last three months.
However, Twitter’s decision to monetize certain creators has sparked controversy. Andrew Tate, a self-proclaimed “misogynist” online influencer, who is facing charges of human trafficking, rape, and organizing a criminal gang in Romania, is among those who now receive monetization from Twitter.
