Twitter faces decline in advertising revenue, with continuous negative cash flow.

According to the BBC News, Elon Musk stated on Saturday that Twitter's cash flow remains negative due to a nearly 50% decline in advertising revenue and a heavy debt burden, far from his expectations in March of achieving positive cash flow by June.

In response to a tweet suggesting capital restructuring, Musk emphasized that only after a company achieves positive cash flow should other investments, expenses, or expansion plans be considered. In another tweet on Sunday, Musk mentioned that Twitter did not meet expected growth in advertising revenue, particularly in June, but added, “July looks slightly hopeful.” Musk also noted that Twitter Spaces, the live streaming platform, has not generated revenue and is a “fully burdened cost.”

These are the latest indications, following Musk's aggressive cost-cutting measures since acquiring Twitter in October last year, that these measures have not been sufficient to achieve positive cash flow for Twitter. It suggests that Twitter's advertising revenue may not have recovered as quickly as implied by Musk in an interview in April, where he stated that most advertisers have returned to Twitter.

Following massive layoffs and reductions in cloud service expenses, Musk previously stated that the company would reduce non-debt expenditures from an expected $4.5 billion in 2023 to $1.5 billion. Due to a $44 billion deal to take it private, Twitter has to pay approximately $1.5 billion in interest annually.

The timeframe of Musk's mentioned 50% decline in advertising revenue is currently unclear. He has mentioned that Twitter expects revenue of $3 billion in 2023, lower than the $5.1 billion in 2021.

Twitter has faced criticism for inadequate content moderation, leading many advertisers to leave as they are unwilling to display their ads alongside inappropriate content.

Musk has hired former chairman of advertising at NBCUniversal, Linda Yaccarino, to serve as CEO. This move signifies that advertising sales remain a focal point for Twitter, despite the company's efforts to increase subscription revenue.

Yaccarino joined Twitter in early June and informed investors that the company plans to focus on video, creators, and business partnerships. Twitter is currently engaged in preliminary discussions with political and entertainment figures, payment service providers, as well as news and media publishers. On Thursday, Twitter announced that select content creators will be eligible to receive a portion of the company's advertising revenue, aiming to attract more creators to the platform.