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Twitter has today announced its results for the second-quarter of 2022, saying that it has seen a sharp rise in the number of regular users. In the last three months, Monetizable Daily Active Users (mDAU) climbed from 39.6 million to 41.5 million, while global reach leapt from 189.4 million in April to 196.3 million today. Unfortunately, those increasing user figures did not see a boost in the company’s bottom line, and revenue was $1.18 billion, which is slightly down both year-on-year and quarter-on-quarter.
Worse still for a company bringing in that much revenue is that costs and expenses for the period equalled $1.52 billion, with extra pain coming from both the costs of dealing with Elon Musk’s purchase of Twitter and paying severance for all of the workers it’s been laying off as part of its cost-cutting drive. All in all, the company posted a net loss of $270 million, much of which it attributes to both the looming recession and the uncertainty around the proposed takeover.
Back in April, as part of its first quarter financial release, Twitter revealed that it had historically miscounted its user figures. Between 2019 and 2021, the company had counted users with multiple accounts as multiple people, adding up to two million users to the figures. This, while not a catastrophic admission, did serve to highlight that Twitter’s slow growth was even slower than people believed. At the time, the company also said that it had earned $1.20 billion in revenue, $1.11 billion of which was produced through advertising, while the average monetizable daily user figures hit 39.6 million in the US and 189.4 million in the rest of the world.
While this was going on, Twitter had also been targeted as an acquisition vehicle for Elon Musk, and the deal has dominated much of the news cycle ever since. The Tesla and SpaceX CEO pledged to buy the company at a very high valuation, and signed a binding agreement that opted to waive much of the due diligence often necessary in deals like this. Not long after, however, Musk decided — either on his own, or influenced by Tesla’s dwindling stock price — to try and pull out of the deal, claiming that Twitter had misrepresented how many automated accounts were on the platform.
Unfortunately for Musk, contract law is often funny about letting people walk away from deals they signed promising to waive the necessary due diligence. Twitter has since sued the figure in order to either force him to buy, or to pay a significant sum to make the whole thing go away. The Delaware Court of Chancery rejected Musk’s request to hold a trial in 2023, and accepted Twitter’s plea to expedite the matter. Consequently, the pair will square off for a five-day courtroom showdown in October.
Twitter has said, once again, that it believes Musk’s “purported termination is invalid and wrongful,” and that the proposed merger deal “remains in effect.”
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