Elon Musk revealed on Twitter on Saturday that the service still has a negative cash flow as a result of a 50% decline in advertising revenue and a “heavy debt load.”
In response to a follower’s business advice, the billionaire owner tweeted on Saturday, “Need to reach positive cash flow before we have the luxury of anything else.”
The tone of the post is remarkably different from what Musk said to the BBC in April when he claimed that the platform is now “roughly breaking even” and that the majority of its sponsors have returned.
After Musk took ownership, a large number of sponsors left the site, making ad income a divisive issue and an uphill battle for the website. Content moderation, huge layoffs, and general apprehension about Twitter’s future worried advertisers.
Former NBCUniversal marketing executive Linda Yaccarino just succeeded Musk as CEO; he is probably relying on her marketing expertise to win them back.
According to an internal presentation cited by The New York Times, Twitter’s US advertising revenue from the five weeks ending April 1 to the first week of May was down 59% from the same period last year. No one from CNN has seen the presentation.
According to the information given to CNN by market intelligence company Sensor Tower last month, only 43% of Twitter’s top 1,000 advertisers in September—the month before Musk’s takeover—were still running ads there as of April.
In a Twitter Spaces livestream event he co-hosted with Robert F. Kennedy Jr. last month, Musk remarked, “It’s been extremely difficult.” We basically lost half of our revenue as a result of not abiding by the rules. He continued, saying that it has been a “huge struggle for Twitter to break even.”
Additionally, Twitter is under more pressure now that its rival app, Meta’s Threads, has more than 100 million downloads less than a week after its release.
Musk has incorporated a number of cost-cutting or revenue-generating techniques into the website, such as putting Tweetdeck behind a paywall and awarding blue checkmarks with a Twitter Blue membership.