Twitter's cash flow still negative as ad revenue drops, says Elon Musk

It is unclear what time frame Musk was referring to by the 50% drop in ad revenue. He has said Twitter was on track to post $3 billion in revenue in 2023, down from $5.1 billion in 2021.

FP Staff|Jul 15, 2023, 23:13:55 IST

Elon Musk claimed on Saturday that Twitter's cash flow remained negative due to a roughly 50% decline in advertising revenue and a large debt load, falling short of his March prediction that Twitter will be cash flow positive by June.

"Need to reach positive cash flow before we have the luxury of anything else," Musk said in a tweet replying to suggestions on recapitalization.

This is the latest sign that the aggressive cost-cutting measures since Musk acquired Twitter in October alone are not enough to get Twitter to cash flow positive, and suggests Twitter's ad revenue may have not recovered as fast as Musk suggested in an interview in April with the BBC that most advertisers had returned to the site.After laying off thousands of employees and cutting cloud service bills, Musk had said the company reduced its non-debt expenditures to $1.5 billion from a projected $4.5 billion in 2023. Twitter also faces annual interest payments of about $1.5 billion as a result of the debt it took on in the $44 billion deal that turned the company private.

It is unclear what time frame Musk was referring to by the 50% drop in ad revenue. He has said Twitter was on track to post $3 billion in revenue in 2023, down from $5.1 billion in 2021.

Twitter has been criticized over lax content moderation, followed by an exodus of many advertisers who did not want their ads appearing next to inappropriate content.

Musk's hiring of Linda Yaccarino, former ad chief at Comcast's NBCUniversal as CEO, signalled that ad sales are a priority for Twitter even as it works to increase subscription revenue.

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