Twitter hasn't become cash flow positive yet, Elon Musk has confirmed, with a "heavy debt load" and advertising revenue dropping to half its usual amount not helping matters for the billionaire.
In March, Musk offered a prediction that Twitter had a chance of being cash flow positive by the second quarter of 2023. In a Saturday tweet, Musk admits the micro-blogging site hasn't met the mark.
In response to a question about refactoring debt, Musk told followers "We're still negative cash flow, due to ~50% drop in advertising revenue plus heavy debt load." Twitter needs to "reach positive cash flow before we have the luxury of anything else," he added.
Twitter's problems stem from a number of issues compounding the problem. For a start, the "heavy debt load" is caused by interest payments on debt Twitter took on when Musk acquired it and took it private.
According to Reuters, the annual interest payments cost Twitter around $1.5 billion.
The 50% drop in ad revenue is also an issue for the company, which has stumbled in its relationship with advertisers post-acquisition. This period allegedly included Apple as an advertiser who apparently veered away from Twitter, but later made a return.
Musk's comments surface as Twitter is under attack from Threads, a rival platform that has seen considerable short-term success. Naturally, shortly after launch, Twitter threatened to sue Meta for copying it.