Elon Musk said Saturday that Twitter's cash flow remains negative as the social media platform he bought for $44 billion last year has lost roughly half of its advertising revenue.
"We're still negative cash flow due to a 50% drop in advertising revenue plus heavy debt load," the billionaire said in a post, responding to a user who was giving suggestions on financing for the platform.
"Need to reach positive cash flow before we have the luxury of anything else," Musk said in a tweet replying to suggestions on recapitalization.
This is the latest sign that the aggressive cost-cutting measures since Musk acquired Twitter in October alone are not enough to get the company to cash flow positive.
It suggests its ad revenue may have not recovered as fast as Musk suggested in an interview in April with the BBC that most advertisers had returned to the site. Musk had said the company might become cash-flow positive in the second quarter.
After laying off thousands of employees and cutting cloud service bills, Musk had said the company reduced its non-debt expenditures to $1.5 billion from a projected $4.5 billion in 2023.
Twitter also faces annual interest payments of about $1.5 billion due to the debt it took on in the $44 billion deal that turned the company private.
It is unclear what time frame Musk was referring to by the 50% drop in ad revenue. He has said Twitter was on track to post $3 billion in revenue in 2023, down from $5.1 billion in 2021.
Insider Intelligence has reported that Twitter was set to earn less than $3 billion in 2023, down one-third from 2022.
Twitter has been criticized over lax content moderation, followed by an exodus of many advertisers who did not want their ads appearing next to inappropriate content.
Musk's hiring of Linda Yaccarino, former ad chief at Comcast's NBCUniversal, as CEO, signaled that ad sales are a priority for Twitter even as it works to increase subscription revenue.
Yaccarino started working at Twitter in early June and has told investors Twitter plans to focus on video, creator and commerce partnerships and is in early talks with political and entertainment figures, payments services, and news and media publishers.
On Thursday, Twitter said that select content creators would be eligible to get a part of the ad revenue the company earns in an attempt to draw more content creators to the site.
Changes instituted by Musk since his takeover of Twitter have turned off users and advertisers alike.
Earlier this month, Musk announced that Twitter was limiting verified accounts to reading 10,000 tweets a day. Non-verified users – the free accounts that make up the majority of users – are limited to reading 1,000 tweets per day. New unverified accounts would be limited to 500 tweets.
A few days later, Twitter said TweetDeck, a popular program that allows users to monitor several accounts at once, will be available only to "verified" users from next month.
The changes came as Threads, an app launched by Facebook parent Meta as a rival to Twitter, signed up more than 100 million users in its first five days.
Twitter is thought to have around 200 million regular users, but it has suffered repeated technical failures since Musk bought the platform and sacked thousands of staff.
Musk has threatened to sue Meta for stealing trade secrets and intellectual property, claims denied by the company.