NIX Solutions: Twitter Revenue Shift and Challenges

Since Elon Musk’s acquisition of Twitter, now rebranded as X Corp., the focus has sharpened on the platform’s relationship with advertisers. Advertisers continue to constitute the bulk of X’s revenue, estimated at $2.5 billion for this year, a notable decline from Twitter’s 2022 advertising revenue, which exceeded $1 billion per quarter.

NIX Solutions

Bloomberg reports that X garnered approximately $600 million in advertising sales per quarter over the past year. This trend is expected to persist, projecting the annual advertising revenue to hover around $2.5 billion. According to Bloomberg’s sources, advertising revenue accounts for 70% to 75% of X’s total revenue, projected at $3.4 billion annually when considering subscriptions and royalties from third-party companies.

Challenges and Transition to Subscriptions

Initial projections by X’s management aimed for roughly $3 billion in combined advertising and subscription revenue this year. However, Musk acknowledged a 50% drop in advertising revenue post-acquisition, followed by a subsequent 60% decline from US advertisers. Musk openly criticized boycotting advertisers, accusing them of undermining the company’s business.

Despite efforts to transition X into a subscription-based platform, results have been underwhelming, generating an estimated $120 million annually. Musk’s goal to elevate subscription revenue to half of X’s income remains unmet, with active subscribers barely exceeding 1 million, far below initial projections. To mitigate dependence on major advertisers, the platform is actively courting small and medium-sized businesses.

Revenue Challenges and Future Outlook

Musk’s expressed concern about bankruptcy due to declining ad revenue underscores the challenges facing X, notes NIX Solutions. Previously profitable, Twitter’s 2020 revenue peaked at $5 billion. Under Musk’s ownership, the company aspires to meet past revenue goals set by its founder, Jack Dorsey, aiming for $7.5 billion by 2023. As X navigates this transition, uncertainties persist regarding revenue streams and sustainability.