Twitter still has a negative cash flow as a result of a 50 percent drop in advertising revenue and a heavy debt load, owner, Elon Musk, stated in a tweet on Saturday.
“Need to reach positive cash flow before we have the luxury of anything else,” Musk said in a reply to business advice from a follower.
Musk’s announcement contradicts his remarks in April, in which he said the social media platform is roughly breaking even, and most of its advertisers have returned.
Ad revenue has been an issue for Twitter, especially after Musk took ownership of the company, as a large number of sponsors left the site due to content moderation, huge layoffs, and overall apprehension about the platform’s future.
The New York Times reported a decline in Twitter’s US advertising revenue from April 1 to the first week of May by 59 percent year-over-year.
Market intelligence firm, Sensor Tower, also reported that only 43 percent of Twitter’s top 1,000 advertisers in September, a month prior to Musk’s acquisition, were still advertising on the platform.
“It’s definitely been extremely difficult, basically, our revenue is cut in half because we didn’t toe the line, it’s been a huge struggle for Twitter to break even,” said Musk in a Twitter Spaces event with Robert F. Kennedy Jr. in June.
Despite the pressure, Twitter announced on Thursday that content creators will be paid from the site’s ad revenue, to encourage more creators to join the site. Eligible creators must be subscribed to Twitter Blue, and have at least five million impressions on their posts in each of the last three months.
We’re still negative cash flow, due to ~50% drop in advertising revenue plus heavy debt load. Need to reach positive cash flow before we have the luxury of anything else.
— Elon Musk (@elonmusk) July 15, 2023
