Days after being bought by Elon Musk, Twitter posted its first quarter results with its revenue missing Wall Street’s expectations.
While its Q1 revenue increased by 16 percent year over year totaling US$1.2 billion, it missed the US$1.23 billion expectation made by Wall Street analysts.
The company said this figure “reflected headwinds associated with the war in Ukraine”. When excluding MoPub and MoPub Acquire, year-over-year growth was 22 percent.
At the time of publication, no statement was available from CEO Parag and he made no mention of the results on his Twitter account.
Advertising revenue totaled US$1.11 billion, an increase of 23 percent and subscription and other revenue totaled US$94 million, a decrease of 31 percent year-over-year.
Costs and expenses totaled US$1.33 billion, an increase of 35 percent year-over-year. This resulted in an operating loss of US$128 million and -11 percent operating margin, compared to an operating income of US$52 million or 5 percent operating margin in the same period of the previous year.
The social media site’s net income was US$513 million, representing a net margin of 43 percent and diluted EPS of $0.61.
It’s net income of US$513 million includes a pre-tax gain of US$970 million from the sale of MoPub for US$1.05 billion and income taxes related to the gain of US$331 million. This compares to net income of US$68 million, a net margin of 7 percent and diluted EPS of $0.08 in the same period of the previous year.
The company will not be providing any forward guidance due to the pending acquisition of Twitter by Elon Musk and it is withdrawing all previously provided goals and outlook.
Twitter entered into a definitive agreement to be acquired by an entity wholly owned by Elon Musk, for $54.20 per share in cash.
Musk paid US$44 billion for the site and upon completion of the transaction, Twitter will become a privately held company. The transaction is subject to customary closing conditions and completion of regulatory review and Twitter’s stockholder approval. The transaction, which is expected to close in 2022, has been approved by the board of directors of Twitter.
Its previous quarters’ results also came below analysts’ expectations.