Twitter’s India unit swings to loss in FY22

Twitter’s India unit swung into losses for the financial year ended March 31, 2022, owing to a more than three-fold increase in its employee benefit expenses, despite a significant gain in operating revenue.

The social networking company is currently owned by Tesla CEO Elon Musk, who completed the $44 billion buyout to take it private on October 27. Most of its India employees have been let go during the ensuing layoffs earlier this month.

The company posted a net loss of Rs 31.84 crore for the year, against a profit of Rs 7.76 a year back, as per Twitter’s latest filing with the Registrar of Companies, shared by business intelligence platform Tofler.

Operating revenue grew to Rs 156.75 crore for the financial year, posting a 81.5 percent year-on-year (YoY) increase from Rs 86.36 crore in the previous financial year.

It’s worth noting that these revenue numbers don’t represent the sales revenues of the company, but rather the income generated for rendering support services for Twitter’s group entities.

These include marketing support and user support services to build, maintain and expand the internet user community and potential advertisers in India as well as services to support research and development (R&D) assignments, programmes and projects, the company mentioned in the filing.

Revenue from marketing support services grew by 30.2 percent YoY to Rs 66.23 crore while revenue from R&D services rose by 144.4 percent to Rs 81.62 crore. User support services saw more than four-fold increase in its revenue to Rs 8.9 crore for the year.

Read: What Elon Musk’s Twitter takeover means for India

In terms of expenses, the social media firm saw its employee benefit expense jump over three-fold to Rs 136.81 crore in FY22, from Rs 43.25 crore in FY21.

This includes ESOP expenses of Rs 44.3 crore for FY22, which was nil last year and a 113 percent increase in salaries and wages to Rs 80.1 crore for the year, from Rs 37.59 crore a year back.

The company’s advertising promotional expenses also nearly doubled to Rs 6.89 crore for FY22 from Rs 3.59 crore in FY21. As a result, overall expenses shot up by 140.2 percent YoY to Rs 182.06 crore for the year, from Rs 75.78 crore in the preceding year.

Elon Musk completed the purchase of Twitter on October 27, following a months-long chaotic saga that saw many dramatic twists and turns – from legal challenges to public spats to disparaging memes and a courtroom trial that eventually didn’t happen.

Since then, the mercurial billionaire pushed out almost all of Twitter’s top executives including CEO Parag Agrawal while eliminating nearly half of the company’s workforce or about 3,700 jobs across the world. The India unit has been reduced from about 250-300 people to about a dozen people, as per report. Moneycontrol