Twitter, in one of its last earnings reports before Elon Musk takes the company private, reported revenue that missed analysts’ estimates, reflecting a slowdown in advertising.

Revenue rose to US$1.2-billion in the first quarter, the social media company said on Thursday. That compared to the average forecast for $1.23-billion. The 16% gain in sales was the worst pace of growth in six quarters, and is in line with reports from Snap and Meta Platforms, which are grappling with lower advertising spending due to issues with supply chains, inflation and the ongoing war in Ukraine.

At the same time, Twitter reported a 16% increase in daily active users, to 229 million, beating estimates for 226.4 million. The stock was little changed in pre-market trading, given Musk’s agreement earlier this week to buy the company for $54.20/share.

Twitter has found itself the subject of much of the conversation on its own platform in recent weeks as Musk’s $44-billion bid to buy the company has played out in public. The billionaire has his own ideas about how to improve the 16-year-old social networking site, which he has promised to turn into an unfettered free-speech zone, a move that he has said is “essential to a functioning democracy”.

The outspoken entrepreneur with 86 million followers has hinted at a long list of changes he wants to make, while at the same time casting doubt on the advertising model that accounts for the bulk of Twitter’s revenue. He’s on record as saying he’s not in it for the money. “I don’t care about the economics at all,” Musk said at a TED conference when the deal was announced. Some have speculated that Musk may try and push more aggressively into a different business model, like subscriptions. Twitter currently offers a $3 monthly subscription service in some markets for the site’s most active users, and also makes some money through a data licensing business.

While Twitter’s financial prospects may not be a priority for the world’s richest person, Musk still has much riding on Twitter’s success since he is financing $21-billion out of his own pocket. Twitter reported earnings per share of $0.61 in the first three months of the year.

Months-long saga

Reaching an agreement earlier this week was the culmination of a months-long saga that saw Musk amass 9% of Twitter’s shares; launch a fusillade of criticism at Twitter’s management; rebuff an invitation to join the company’s board; and then announce an offer that many people first construed as a weed joke.

Once the deal closes, however, Musk may no longer have to answer to Wall Street but he will have other constituents to please, including employees who keep Twitter’s engines running, and users. His promise to ease content moderation policies may be a welcome change for some people, but it has alarmed black, Muslim, LGBTQ+ and other groups who have voiced worry about increased harassment on the platform and has caused concern among advertisers who are brand conscious and wouldn’t want their ads to show up next to controversial posts.