He said the company had not seen the increase in receipts that had been expected in June, but added that July was a “bit more promising.”
Mr Musk sacked about half of Twitter’s 7,500 staff when he took over in 2022 in a effort to cut costs.
Rival app Threads now has 150 million users, according to some estimates.
Its in-built connection to Instagram automatically gives the Meta-designed platform access to a potential two billion users.
Meanwhile, its competitor is struggling under a heavy debt load. Cash flow remains negative, Mr Musk said at the weekend, although the billionaire did not put a time frame on the 50% drop in ad revenue.
In a tweet he said: “Need to reach positive cash flow before we have the luxury of anything else.”
After laying off thousands of employees and cutting cloud service bills, Mr Musk said Twitter was on track to post $3bn (£2.29bn) in revenue in 2023, down from $5.1bn (£3.89bn) in 2021.
The development is the latest sign the aggressive cost-cutting measures have not been enough to ignite a return of advertisers who fled after changes to its content moderation rules.
That is despite an interview the former CEO gave to the BBC in April in which he suggested that most had returned to the site.
Earlier this month Twitter decided to restrict how many tweets its users could read. Unverified users can read 1,000 tweets, and verified users 10,000 per day, a move which the BBC said has baffled advertising executives.
It follows efforts to push users towards Twitter Blue, its paid subscription service.
Linda Yaccarino, previously head of advertising at NBCUniversal, was taken on as CEO in June – a move suggesting advertising sales are still a priority for Twitter.
Ms Yaccarino has said Twitter plans to focus on video, creator and commerce partnerships. It is said to be in early talks with political and entertainment figures, payments services, and news and media publishers.