Twitter has announced its second quarter results for 2022 in a press release early Friday, July 22, highlighting some misses in various analyst estimates. One key takeaway from its Q2 report is witnessed a slight drop in revenue, sliding by 1% year over year to $1.18 billion, a $140 million dip from the estimated $1.32 billion revenue potential set by Wall Street. Additionally, the firm's expected earnings per share of 14 cents, set by Refinitiv analysts, was also missed, seeing a loss of 8 cents. Refinitiv's expected Monitzable Daily Active Users (mDAUs) for Twitter's Q2 results, set at 238.08 million, was also slightly offbase at the reported 237.8 million.
Revenue under Twitter analytics was hit hard for its Q2 2022 results, which dipped 11% below estimates set by Refinitiv. Several internal constraints, main among them being expenses and the underlying economic environment, disallowed Twitter increased momentum this quarter. The firm's costs and expenses year over a year hit a whopping $1.52 billion, a 31% increase. Twitter's 8 cents a share loss this quarter also marks the second adjusted loss in its existence and the first over the course of two years.
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In its press release, Twitter cites a consortium of issues plaguing its business, most prominent among them being the financial climate. Ever-increasing interest rates, on top of inflation concerns, have set markets and industries ablaze over the past several months. In addition, the still-ongoing Russian invasion of Ukraine and logistical woes wrought by supply chain constraints have proven detrimental to international business, with many brands fixing ad spending in the face of these worldwide mishaps.
But of major note in accordance with Twitter's missed Q2 results is the several-month-long acquisition deal set by Tesla and SpaceX executive Elon Musk. In its Q2 earnings report, Twitter highlights a supposed "uncertainty related to the pending acquisition of Twitter by an affiliate of Elon Musk." The CEO was first meant to join Twitter's board of directors, yet no sooner pivoted and struck a $44 billion agreement to acquire the firm in late April.
Since then, Musk has been dragging his feet, bombarding his Twitter following with memes, and complaining about a supposed bot infestation under Twitter's user base. For Twitter, however, it has been all hands on deck to deliver the social media site as promised to the executive through a variety of talent cutbacks and spending. The Wall Street Journal reported in early July that the company had slashed a third of its recruiting team in the lead-up to Musk's takeover. Twitter noted that costs associated with Musk's buyout agreement equated to around $33 million, $19 million of which was tied to severance to the aforementioned downsizing.
Twitter and Elon Musk will now butt heads in court in accordance with the social media site's lawsuit against the Tesla executive for backing out of the agreement. An expedited five-day trial is set for October following Judge McCormick's ruling two days prior. The Twitter stock price dipped in early morning trading on Friday after the release of its Q2 earnings, yet has slowly rebounded in the afternoon, seeing a 0.38% jump as of writing at $39.70 a share.
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