New reporting puts the social media company’s new life into context
Taking a company private can be a smart way to reform its operations outside the public-market limelight; no longer required to report quarterly to the world, companies that go private often have more latitude to make tough changes to their product mix and employee base.
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So, how is Twitter doing now that it is a private company, and a busy one at that? Per The New York Times, the social media company is enduring painful revenue declines compared to year-ago results. This new data echoes what we’ve heard concerning Twitter’s late-2022 results as well.
Elon Musk took Twitter private in late 2022, meaning that it has been a private company for some quarters now. Under new management, it has dramatically reduced its staffing, worked on expanding its subscription-revenue footprint, and taken a new tonal direction under its new owner. The company is also in the process of onboarding a new CEO, even if its owner intends to retain control over a broad swath of Twitter’s product work.
This morning I want to do a little historical sleuthing through Twitter’s public results, information that we can compare and contrast to more recent information. Then we’ll mix in some information regarding Twitter’s debt costs and its slashed cost basis.
We’re going to be mixing reported data, hard figures, and some larger macro trends all at once. Our goal will be directional comprehension, and nothing more specific. Sound good? To work.
Twitter’s financial results
The Times reports that Twitter’s advertising revenues from the United States in the roughly five-week period from April 1, 2023, through the first week of May came to $88 million. That figure, while a large amount of money in the abstract, is off 59% from the year-ago result the Times wrote, “according to an internal presentation” that it managed to snag.
The same report had a few other key facts, including that Twitter expects that “its U.S. ad revenue this month will be down at least 56 percent each week compared with a year ago.”
The question before is just how bad those declines are. A few things to keep in mind as we examine them: