Twitter just reported earnings for the first quarter of 2022, in what may be its last report as a public company after the Board agreed to sell to Elon Musk for $44 billion this week.
According to the report, the company missed the expected revenue of $1.23 billion, making only $1.2 billion instead. However, it reported a 16% gain in advertising sales. The gain is the worst pace of growth in six quarters and is in line with reports from Snap Inc. and Meta Platforms Inc., which are also facing lower advertising spending due to issues such as struggling supply chains and inflation.
The company reported 229 million Monetizable Daily User Accounts known as mDUAs. The number was slightly higher than the expected 226.9 million, representing a 15.9% increase from the same period last year. The U.S. mDUAs were up 6.4% from the prior year’s quarter, at 39.6 million. International mDUAs were at 189.4 million, an increase of 18.1% from the year before.
As a result of the report, shares saw about a 1% increase in early trading on Thursday.
However, the report did point out a correction from a previous earnings release. Twitter noted that it had overstated the mDUAs previously, an error that purportedly resulted from launching a feature that allows users to easily switch between their separate accounts. The company said that between Q1 and Q4 2021, all linked accounts were counted as mDUAs when the primary account made an action.
Before the deal between Musk and Twitter was announced on Monday, some analysts speculated that Twitter might have wanted to finalize the agreement before reporting earnings. The analysts had anticipated a disappointing quarter.
Twitter previously set a goal to reach 315 million mDUAs by the end of 2023 and boost annual revenue to $7.5 billion in the same period. Twitter would have needed to add 86 million more new users over the next seven quarters, an average of 12.3 million per quarter. However, the company added only 25 million total new users in 2021.
“Given the pending acquisition of Twitter by Elon Musk, we will not be providing any forward-looking guidance and are withdrawing all previously provided goals and outlook,” the company said in Thursday’s report.