Twitter Shows User Growth, Misses Estimates Amid Musk Takeover Dispute

The company blames its revenue shortfall on "advertising industry headwinds" in a troubled economy and "uncertainty" related to Musk's rocky takeover bid.

Queenie Wong Former Senior Writer
Queenie Wong was a senior writer for CNET News, focusing on social media companies including Facebook's parent company Meta, Twitter and TikTok. Before joining CNET, she worked for The Mercury News in San Jose and the Statesman Journal in Salem, Oregon. A native of Southern California, she took her first journalism class in middle school.
Expertise I've been writing about social media since 2015 but have previously covered politics, crime and education. I also have a degree in studio art. Credentials
  • 2022 Eddie award for consumer analysis
Jon Skillings Editorial director
A born browser of dictionaries and a lifelong New Englander, Jon Skillings is an editorial director at CNET. He honed his language skills as a US Army linguist (Polish and German) before diving into editing for tech publications -- including at PC Week and the IDG News Service -- back when the web was just getting under way, and even a little before. For CNET, he's written on topics from GPS to 5G, James Bond, lasers, brass instruments and music streaming services.
Expertise language, grammar, writing, editing Credentials
  • 30 years experience at tech and consumer publications, print and online. Five years in the US Army as a translator (German and Polish).
Queenie Wong
Jon Skillings
2 min read
Twitter bird logo

Twitter makes most of its money from selling ads.

James Martin/CNET

The number of people using Twitter every day jumped in the second quarter as the social network negotiated a deal to sell itself to billionaire Elon Musk for $44 billion, but the company's revenue and profit took a hit.

In the quarter ending on June 30, roughly 237.8 million daily users who could see ads logged onto the site, a nearly 4% uptick compared to the previous quarter and up 16% from the year-ago quarter. 

Despite the increase in traffic, Twitter said in its earnings report Friday that it lost 35 cents per share, worse than Wall Street's expected loss of 9 cents per share. Excluding certain expenses, Twitter lost 8 cents per share, missing the 14 cents per share expected by analysts surveyed by Thomson Reuters. Revenue was $1.18 billion, down 1% year over year, falling short of the $1.3 billion expected by analysts. 

The lackluster performance comes as Twitter continues to battle Musk, who is trying to back out of his agreement to buy the company. Twitter sued the entrepreneur, who runs car company and rocket maker SpaceX, to complete the deal. A trial over the dispute is expected to happen in October over five days.

On Friday, Twitter attributed the revenue shortfall to "advertising industry headwinds" given the overall state of the global economy and "uncertainty" related to Musk's takeover bid. Costs related to the pending acquisition were approximately $33 million during the second quarter, the company said.

The company canceled the analyst call that is commonly held after the earnings report.

Like other tech companies, Twitter is bracing for a potential recession. The company laid off nearly 100 workers in July after freezing hiring. 

Social media companies are also grappling with advertising slowdowns. Some marketers are pausing ad campaigns during the Russia-Ukraine war. Privacy changes at Apple have also made it tougher for advertisers to track the effectiveness of their campaigns. 

Twitter's goal of reaching $7.5 billion of revenue and 315 million monetizable daily users in 2023 will likely be tougher to achieve during an economic downturn.

Twitter's stock was holding about even in early trading Friday after the company released its earnings.