(Reuters) -Twitter Inc on Friday blamed its ongoing battle to close its $44-billion acquisition by Elon Musk and a weakening digital advertising market for a surprise fall in quarterly revenue.
The results come as Twitter has sued Musk for dropping his offer to buy the company, and is now preparing for a legal showdown in a trial set to begin in October. The deal uncertainty has worried Twitter’s advertisers and caused chaos inside the company.
Advertising revenue rose just 2% to $1.08 billion, missing Wall Street expectations of $1.22 billion, according to Refinitiv IBES data.
Total second-quarter revenue, which also includes revenue from subscriptions, was $1.18 billion, compared with $1.19 billion a year earlier. Analysts were expecting $1.32 billion.
Twitter shares were down 3% in trading before the bell.
Twitter said its net loss was $270 million, or 35 cents per share, down from a profit of $65.6 million, or 8 cents per share, a year earlier.
Its adjusted 8-cent loss missed expectations for a 14-cent adjusted profit.
On Thursday, Snapchat parent Snap Inc posted weak results and declined to make a forecast, citing “incredibly challenging” conditions as advertisers cut back on spending.
Twitter and its peers, including Snap and Alphabet, saw an uptick in revenue last year as brands spent heavily on advertising online, eyeing a recovery from the pandemic.
But inflation pressures and fears of a recession this year have forced brands to rethink their marketing budgets.
At the same time, Gen-Z favorite TikTok and tech giant Apple Inc, which gives users the choice to opt out of data tracking, are grabbing market share in the digital ad space.
(Reporting by Nivedita Balu in Bengaluru and Sheila Dang in Dallas; Editing by Saumyadeb Chakrabarty and Nick Zieminski)