Twitter has published its Q2 2022 results, with the social networking giant’s numbers falling short of analysts’ estimates across user growth and revenues.
Perhaps more interestingly, however, Twitter also revealed that it spent $33 million in Q2 on Elon Musk’s pending acquisition.
Twitter vs. Musk
Today’s results represent Twitter’s second earnings since accepting Elon Musk’s $44 billion acquisition bid back in April, but a lot has happened in those intervening months. To cut a long story short, Musk decided he didn’t want to buy Twitter any more, but Twitter is trying to force the deal through, and a judge ruled last week that the company could expedite legal proceedings against the billionaire.
However, that is still months away from reaching anything close to a resolution, and until then Twitter remains a public company that is answerable to its many shareholders. And so today, Twitter announced that its Q2 revenue amounted to $1.18 billion, down around 5% on the previous quarter and 1% on the corresponding period last year — analysts had estimated its Q2 revenues at around $1.32 billion. This, according to Twitter, reflects “headwinds’ in the advertising industry related to the current economic environment, while it also pointed to “uncertainty” caused by Musk’s attempts to pull out from the deal.
Elsewhere, Twitter’s monetizable daily active users (mDAUs) actually increased 16.6% year-on-year to 237.8 million; however, this fell marginally short of estimates, which were pegged at 238.08 million.
Perhaps unsurprisingly, Musk’s name cropped up quite a few times in Twitter’s Q2 results. For instance, the company said that it would not be hosting its usual post-earnings conference call due to the pending acquisition, nor would it issue a shareholder letter or provide any form of future-gazing financial guidance. The company also called Musk’s planned termination “invalid and wrongful.”
But arguably the most interesting nugget was its year-on-year increase in costs and expenses, which grew 31% to $1.52 billion.
As with many other companies across the industrial spectrum, Twitter has had costs to bear in terms of downsizing and restructuring, with a number of senior executives leaving the company — and it’s against that backdrop that Twitter today reported $19 million in severance costs this quarter. In preparation of a broader hiring freeze, Twitter also recently laid off 30% of its talent acquisition team; however, that hit won’t show up until its Q3 report later this year.
But star of the show in its costs and expenses surge was undoubtedly the aforementioned $33 million it spent on Musk’s flip-flopping acquisition offer — a figure that will only increase as Musk does his damndest to u-turn on the multibillion-dollar transaction.