Twitter posted a decline in sales and a high loss in the past quarter around the turbulent takeover attempt by tech billionaire Elon Musk. Revenues fell 1% year over year to $1.18 billion. Analysts had expected a good 1.3 billion dollars. Twitter justified the decline with the weakening of the online advertising market and also with the uncertainty surrounding Musk’s takeover plans. Musk announced in April that he wanted to buy Twitter for around $44 billion. A few weeks later, he unilaterally declared the deal suspended and eventually backed out in early July.
Twitter wants a ruling that will oblige Musk to complete the acquisition at the agreed price of $54.20 per share. Overall, Twitter ended the second quarter with a loss of $270 million, down from a profit of nearly $66 million a year earlier. The number of daily active users that Twitter can reach with its advertising because they use the in-house app or the web version rose from 229 million to 237.8 million within three months. In the first quarter, the service gained a good 14 million users.
Also snap hit
The business of the photo app Snapchat is also being hit hard by the weakness in the online advertising market. The otherwise rapid sales growth fell in the past quarter to a meager plus of 13 percent. That wasn’t good enough for investors: they let the stock fall by more than a quarter in after-hours trading on Thursday. On Friday, the titles started again with 2 percent in the red. The turbulence was triggered by high inflation and the weak economy. This situation allows many companies to save on advertising spend – Snapchat’s main source of income. One is in an intensified battle for online advertising dollars with rivals like Tiktok, said the chief financial officer of the operating company Snap, Derek Andersen.
Snap posted its slowest growth since going public just over five years ago, with sales up 13 percent to $1.11 billion. In the first quarter, the growth rate was 38 percent, before that 50 or 60 percent were also common. The quarterly loss widened from just under $152 million a year earlier to a good $422 million.
Course slide for Seagate
Snap did not provide a forecast for the current quarter when the figures were presented after the US market closed on Thursday. The company referred to the imponderables of the business environment. So far, the revenues in this quarter have only been at the level of the previous year. In response to the uncertainty, Snap wants to cut costs and significantly slow down job creation, among other things. Meanwhile, Snapchat remains popular: the number of daily active users increased from 332 to 347 million within three months. They also spent more time on the platform, as Andersen pointed out.
Snapchat is also still struggling with Apple’s measures to better protect privacy on the iPhone. App operators must explicitly ask users for permission if they want to track their behavior across different applications. Many users rejected this – and that torpedoed numerous business models in online advertising. Snapchat is therefore less able to report to advertisers on the success rate of their ads, while the company generally welcomed Apple’s measures.
Snapchat originally got big with the ability to send photos that disappear on their own. In the meantime, however, the company is relying on the combination of digital effects with the real world on a large scale. These can be gimmicks like virtual masks in a video – or the opportunity to “try on” fashion and cosmetics on the mobile phone display. In the long term, Snap sees the greatest growth opportunities in this augmented reality, the company emphasized.
Planned production cuts derail Seagate’s biggest share price slide since the March 2020 stock market crash. Shares in the hard drive maker fell nearly 12 percent in premarket US business. The company justified this with lower demand. In the past quarter, sales fell short of expectations at $2.63 billion. In the wake of Seagate, the titles of rival Western Digital and memory chip manufacturer Micron fell by up to 6 percent.