American billionaire Elon Musk said, on Saturday, that Twitter’s cash flow is still negative due to a decrease in advertising revenues by nearly 50% in addition to the heavy debt burden, which did not live up to his expectations last March that the platform might reach a positive cash flow by June. .
“We need to get to positive cash flow before we can have the luxury of anything else,” Musk said in a tweet on Twitter.
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
This is the latest sign that aggressive cost-cutting measures since Musk’s acquisition of Twitter last October weren’t enough alone to shift cash flow into positive territory. They also suggest that Twitter ad revenue may not have recovered as quickly as Musk spoke in a BBC interview in April when he said most advertisers were back on the site.
After laying off thousands of employees and cutting bills for cloud services, Musk said the company cut its non-debt expenses to $1.5 billion from the $4.5 billion expected in 2023. Twitter also has to make annual interest payments of about $1.5 billion.
It was not clear how long Musk indicated the 50% drop in advertising revenue.
Musk said Twitter is on track to generate $3 billion in revenue in 2023, down from $5.1 billion in 2021.
Twitter was criticized for being lax in supervising content, which was followed by the withdrawal of a large number of advertisers for fear that their ads would appear alongside inappropriate content.