Twitter Struggles To Break Even As Advertisers Continue To Drop

Since Twitter generated $1.2 billion in the first quarter of 2022, running 40% below that would imply a daily revenue of roughly $8 million (and a quarterly revenue of around $720 million).

Twitter Reportedly Struggles To Break Even As Advertisers Continue To Drop - SurgeZirc US
Twitter Reportedly Struggles To Break Even As Advertisers Continue To Drop.

Twitter’s ad business is in trouble, with daily revenue reportedly down 40% year on year. According to The Information, since Elon Musk’s October takeover, over 500 of the company’s major advertisers have suspended spending on the platform.

Despite this, Twitter continues to attract and retain media partnerships because the money is too good to pass up. Despite Musk’s ambitions to diversify Twitter’s revenue away from advertising, the firm is unlikely to break even this year.

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Since Twitter generated $1.2 billion in the first quarter of 2022, running 40% below that would imply a daily revenue of roughly $8 million (and a quarterly revenue of around $720 million).

The company’s capacity to generate $3 billion in sales while paying $1.5 billion in annual interest on the debt Musk raised for the purchase will determine whether it enters the black this year.

The ad problems could lead to even more cost-cutting measures. Some major advertisers are apparently dissatisfied with Musk’s approach to contact moderation, which includes the reinstatement of Donald Trump and the termination of executives in charge of combating hate speech.

Twitter’s headcount has already decreased by around 75 percent since Musk’s takeover, and more layoffs are likely if the hemorrhage continues. Twitter, on the other hand, can take solace in its ability to attract and maintain media partners.

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According to Axios, in the first half of this year, the platform still has relationships with over a dozen media firms, and news outlets (including the Wall Street Journal, Reuters, Bloomberg, Forbes, Conde Nast, and USA Today).

And sports leagues (including the NFL, NBA, NHL, MLB, NASCAR, and PGA Tour). They find Twitter too profitable to give up in an uncertain economy, even if they are hesitant to embrace it openly.

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