Investor interest in Elon Musk’s X has been growing, but the financial performance of the social network deserves special attention. Last year, X turned a profit—an achievement compared to the losses Twitter suffered before Musk’s acquisition. However, revenue for the year remains nearly half of what it was in 2021.
Musk purchased Twitter in October 2022 for $44 billion, largely financed with borrowed funds. As a result, X now carries a significant financial burden, with its debt obligations nearly nine times higher than its revenue. From a banking perspective, the acceptable risk limit is six times revenue, making X’s financial position precarious.
Investors and Political Influence
Despite these challenges, investors continue to show interest in X. Speculation suggests the company’s valuation has returned to its original $44 billion from 2022. Factors such as lack of financial transparency, high debt, and the departure of advertisers no longer seem to deter investors—possibly due to Musk’s growing influence in U.S. politics as an ally of Donald Trump.
Unofficial reports indicate X’s revenue dropped from $2.96 billion in 2023 to $2.6 billion in 2024, compared to Twitter’s $5.1 billion revenue in 2021. However, while Twitter was unprofitable, X reported $1.4 billion in profit last year based on EBITDA calculations. This figure excludes taxes, loan interest, and asset depreciation, but it still marks a financial turnaround under Musk’s leadership.
X’s Partnership With xAI and Future Prospects
X’s collaboration with xAI has been both beneficial and costly, adds NIXSolutions. On the one hand, xAI paid $65 million in license fees and generated over $200 million in additional revenue for X. On the other hand, X had to invest heavily in acquiring expensive accelerators for xAI. As a result, X closed last year with only $400 million in available cash—down from $1.4 billion when Musk acquired Twitter.
Musk’s political stance has driven some advertisers away, but others, including Amazon, Apple, Kraft Heinz, and Stellantis NV, have recently returned. This shift may help stabilize X’s cash flow and accelerate debt repayment, positioning the company as a sustainable income source for Musk. We’ll keep you updated as more developments unfold.