Twitter's Q2 Revenue Declines By 1% YoY to $1.18 billion

Twitter's Q2 revenue has declined 1% YoY to $1.18 billion for the second quarter ended 30th June, reflecting advertising industry headwinds associated with the macroenvironment as well as uncertainty related to the pending acquisition of Twitter by an affiliate of Elon Musk. When excluding MoPub and MoPub Acquire, year-over-year growth was 3%.

Advertising revenue grew 2% to $1.08 billion while subscription and other revenue totalled $101 million, a decrease of 27% year-over-year. Q2 average monetizable daily active usage (mDAU) was 237.8 million, up 16.6% compared to Q2 of the prior year. The increase was driven by ongoing product improvements and global conversation around current events. 

The average US mDAU was 41.5 million for Q2, up 14.7% compared to Q2 of the prior year. The average international mDAU was 196.3 million for Q2, up 17.0% compared to Q2 of the prior year.

Costs and expenses totaled $1.52 billion, an increase of 31% year-over-year. Costs related to the pending acquisition of Twitter were approximately $33 million in Q2. Severance-related costs were approximately $19 million in Q2. 

Operating loss was $344 million, representing a -29% operating margin, compared to operating income of $30 million or 3% operating margin in the same period last year. Net loss was $270 million, representing a net margin of -23% and diluted EPS of -$0.35. This compares to a net income of $66 million, a net margin of 6%, and diluted EPS of $0.08 in the same period last year.

Net cash provided by operating activities in the quarter was $30 million, compared to $382 million in the same period last year. Capital expenditures totaled $154 million, compared to $276 million in the same period last year.

"Given the pending acquisition of Twitter by an affiliate of Elon Musk, we will not host an earnings conference call, issue a shareholder letter, or provide financial guidance in conjunction with our second quarter 2022 earnings release," Twitter says in a release.

On April 25, 2022, Twitter entered into a merger agreement to be acquired by an entity wholly owned by Elon Musk, for $54.20 per share in cash. Upon completion of the transaction, Twitter will become a privately held company. 

On July 8, 2022, representatives of Musk delivered a notice purporting to terminate the merger agreement. "Twitter believes that Mr. Musk's purported termination is invalid and wrongful, and the merger agreement remains in effect. On July 12, 2022, Twitter commenced litigation against Mr. Musk and certain of his affiliates to cause them to specifically perform their obligations under the merger agreement and consummate the closing in accordance with the terms of the merger agreement. On July 19, 2022, Twitter's request for an expedited trial was granted, and the trial is being scheduled for October 2022," the company states.