Twitter Inc (NYSE:TWTR) partially blames Tesla Inc (NASDAQ:TSLA) CEO Elon Musk for its surprise revenue miss, claiming that “uncertainty” stemming from his pending purchase resulted in headwinds in the ad industry and caused its revenue shortfall. The social network also missed consensus estimates for earnings and user growth in the second quarter.
Meanwhile, Snapchat parent Snap Inc (NYSE:SNAP) also posted disappointing results, sending its stock into freefall in early-morning trades.
Q2 2022 hedge fund letters, conferences and more
Twitter Announces Q2 2022 Earnings Results
In a press release, Twitter announced an adjusted loss of 8 cents per share, compared to Refinitiv’s consensus estimate of 14 cents per share in earnings. Revenue came in at $1.18 billion, missing the consensus of $1.32 billion. Twitter also reported 237.8 million monetizable daily active users, compared to Refinitiv’s estimate of 238.08 million.
Q2 2022 hedge fund letters, conferences and more
The social network reported that revenue fell 1% year over year and partially blamed the decline on headwinds in the ad industry due to the broader macroeconomic environment. It also cited “uncertainty related to the pending acquisition of Twitter by an affiliate of Elon Musk” as another reason for its revenue decline.
The company decided not to provide guidance for the third quarter or hold a second-quarter earnings call with analysts due to Musk’s pending acquisition. The matter is now tied up in court after Twitter sued Musk to try to force him to complete the transaction, which he had tried to walk away from. The social network estimated that acquisition-related costs amounted to about $33 million in the second quarter.
The social network’s stock dropped about 2% in pre-market trading but rebounded to trade up by less than 1% after opening bell.
Snap Stock Tanks 35% After Disappointing Results
While Twitter is undoubtedly taking advantage of every opportunity to blame Musk for its problems, its mention of macro concerns for the ad market may be more to blame. Twitter competitor Snap, parent company of Snapchat, reported misses on both the top and bottom lines for the second quarter. Snap shares dived as much as 35% after the disappointing report.
The company posted adjusted losses of 2 cents per share, compared to Refinitiv’s estimate of 1 cent per share in adjusted losses. Snap’s revenue came in at $1.11 billion, compared to the consensus estimate of $1.14 billion. However, the messaging firm had more users than expected during the second quarter, reporting 347 million daily active users, compared to the StreetAccount consensus of 344.2 million.
Although Twitter blamed Musk entirely for its decision not to provide guidance, Snap also declined to guide on upcoming results, stating that “forward-looking visibility remains incredibly challenging.” However, the Snapchat parent also said that revenue for the third quarter is “approximately flat” so far, although analysts had been expecting an 18% increase in sales.