Elon Musk stated on Saturday that Twitter’s cash flow is still negative due to a nearly 50% decline in advertising revenue and a high debt load, falling short of his prediction from March that Twitter might become cash flow positive by June.

“Need to reach positive cash flow before we have the luxury of anything else,” Musk said in a tweet replying to suggestions on recapitalization.

In a subsequent Sunday tweet, Musk noted that while June’s boost in advertising revenue had not materialised, “July is a bit more promising.” Twitter Spaces is “all-cost” and hasn’t yet generated any revenue, according to Musk.

This is the most recent indication that the drastic cost-cutting measures implemented since Musk acquired Twitter in October alone are insufficient to turn the company’s cash flow positive. It also suggests that Twitter’s ad revenue may not have recovered as quickly as Musk indicated in an interview with the BBC in April, when he claimed that the majority of advertisers had come back to the site.

Musk claimed that the company’s non-debt spending was down to $1.5 billion from a predicted $4.5 billion in 2023 after thousands of employees were laid off and cloud service costs were slashed. In addition, Twitter must pay interest on the $1.5 billion in debt it acquired in the $44 billion deal that took the business private every year.

By the 50% decline in ad revenue, Musk may have been alluding to a certain time period. As opposed to $5.1 billion in 2021, he claimed Twitter was on track to generate $3 billion in revenue in 2023.

Due to complaints about Twitter’s inadequate content management, many sponsors left because they did not want their ads to appear next to improper content.

Linda Yaccarino, a former head of advertising at Comcast’s NBCUniversal, was appointed CEO by Elon Musk, indicating that Twitter prioritises ad sales even as it strives to boost subscription revenue.

Early in June, Yaccarino began working at Twitter, and he informed investors Twitter is in preliminary discussions with political and entertainment leaders, payment services, news and media publishers, and creators to focus on video, creators, and commerce relationships.

In an effort to entice more content creators to the site, Twitter said on Thursday that some of them will be qualified to get a portion of the ad money the firm generates.

(Adapted from TheGuardian.com)