Elon Musk’s X ad revenue reportedly fell $1.5B this year amid boycotts

It's hard to know exactly how dire the financial situation is at Elon Musk's X (formerly Twitter). However, insider sources recently revealed to Bloomberg that the social media platform expects to end 2023 with "roughly" $2.5 billion in advertising revenue.

That's "a significant slump from prior years," sources said. It's also about half a billion short of the $3 billion that X executives expected to make in ad sales in 2023, one source said.

Last year, Twitter raked in more than $1 billion in ad revenue per quarter, sources said. But in each of the first three quarters of 2023, X only managed to generate "a little more than $600 million" in ad revenue. Now, the most recent advertiser fallout over antisemitic content on X—estimated in November as triggering a sudden $75 million loss—is still casting a shadow on what could become an even more dismal fourth quarter.

Sources told Bloomberg that advertising earnings comprise 70–75 percent of X's revenue. This suggests that X's total earnings in 2023 will be "roughly $3.4 billion," boosted by subscriptions and data licensing deals, Bloomberg reported.

Joe Benarroch, head of X business operations, told Bloomberg that its report "presents an incomplete view of our entire business, as the sources you’re relying on for information are not providing accurate and comprehensive details."

Benarroch also made it clear that X is no longer interested in being compared to Twitter. According to Bloomberg, Benarroch said that X is an “evolving NEW global business with multiple revenue streams. We are not Twitter any longer and not measuring ourselves by old Twitter metrics—both in revenue and user metrics.”

X did not immediately respond to Ars' request to comment.

Musk beefing with Disney on X

After Musk boosted an antisemitic post on X, he apologized, but he never removed his controversial post and continued antagonizing advertisers that he claimed were "going to kill the company."

Among the major brands pausing advertising on X is Disney, which seems to have particularly offended Musk. He's spent the past week targeting Disney CEO Bob Iger in a series of X posts, calling out Disney for boycotting X. Musk appears particularly frustrated that Disney is advertising on Meta platforms after New Mexico Attorney General Raúl Torrez filed a lawsuit alleging that Facebook and Instagram are "prime locations for predators to trade child pornography and solicit minors for sex."

Last December, Musk was similarly beefing with Apple through a Twitter tirade that Musk admitted later was due to his own "misunderstanding" about Apple's decision-making. That beef didn't seem to impact any of X's other advertiser relationships long-term, but the latest advertiser boycott does not appear that it will be resolved quickly. Musk's continued inflammatory statements about advertisers and the platform's recent decision to reinstate the X account of Sandy Hook shooting-denier Alex Jones could keep advertisers off X. That, as Musk has warned, risks causing serious long-term damage to X as a viable platform.

Although Twitter/X stopped publicly reporting financial data when Musk took over Twitter in 2022, Musk has been transparent about advertiser revenue being down by "roughly 50 percent" throughout 2023. In September, Musk confirmed that things were getting worse, reporting that ad sales were down by 60 percent and blaming groups monitoring hate speech for spooking advertisers off with their #StopToxicTwitter campaign.

Musk has always said that his goal for X is to reduce reliance on advertising by pivoting to subscriptions he hoped would one day comprise half of X's earnings. But X subscriptions are not as popular as planned, sources told Bloomberg. So far, X only has "just over 1 million paying subscribers"—out of hundreds of millions of X users—and X's subscription revenue is "less than $120 million annually," sources said.

X has rarely been profitable, but under Musk, its financial growth so far appears to have been significantly set back. Before Musk took control, Twitter earned more than $5 billion in 2021, Bloomberg reported, and that year Jack Dorsey "set a public goal to reach $7.5 billion in revenue by the end of 2023." That projection makes the current $3.4 billion estimate for 2023 appear especially stark.

As many big brands remain hesitant to advertise on X, the platform is offering deals hoping to attract smaller brands to invest more in the platform.

Generating more ad revenue is crucial not just to meet X's financial goals in 2024 but also to hit Musk's projection of 1 billion monthly X users in 2024. Musk's plan to attract more users largely depends on content creators lured to increase engagement on X by lucrative ad revenue sharing recently launched by the platform.

Creators have already voiced concerns that the current boycott will impact their ability to profit on the platform, and so far, Musk has only said that there's "not much we can do if advertisers boycott or reduce spend on our platform."