Twitter saw a drop in revenue due to Elon Musk‘s initial merger agreement in the second quarter, the company said in its earnings report released Friday.
The social media platform took a 1% year-over-year hit to its revenue — or an increase of 2% on a constant currency basis. The miss came despite a reported increase in users year-over-year by 16.6%.
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These changes in revenue reflected “advertising industry headwinds associated with the macroenvironment as well as uncertainty related to the pending acquisition of Twitter by an affiliate of Elon Musk,” Twitter said in a press release.
Twitter also saw its costs and expenses rise to $1.52 billion, which is 31% more than in 2021. The company’s proceedings regarding Musk’s acquisition of Twitter cost the company $33 million.
Given the pending acquisition by Musk, Twitter decided not to provide estimates for the third quarter. It also declined to host a conference call with analysts to discuss the earning results.
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Twitter’s plans for the next quarter were thrown into turmoil after the billionaire decided to terminate his deal to acquire the company on July 8. Twitter quickly responded by filing a suit against Musk in the Delaware Court of Chancery, intending to force Musk to abide by his signed merger agreement. The two parties met for an initial hearing Tuesday, where they discussed the initial date for the trial. Twitter and Musk’s legal teams will meet in court in October for an expedited trial.
Musk is allegedly considering a countersuit against Twitter in an attempt to get out of his deal over claims that Twitter has lied about its estimates of spambots.
