Twitter on Track to Break Even Financially in 2023, Elon Musk Says

Billionaire Tesla CEO Elon Musk arrives at the San Francisco headquarters of Twitter on Oct. 26. 2022, stating, “Let that sink in” as he completes his $44 billion acquisition of the social media company. Twitter account of Elon Musk/AFP via Getty Images

Twitter is on a path to financially break even this year, Elon Musk said in a Feb. 5 tweet, as the company implements several measures to boost declining revenues.

The comment followed a December 2022 statement by Musk that he was optimistic about the company’s cash flow this year.

“Last 3 months were extremely tough, as had to save Twitter from bankruptcy, while fulfilling essential Tesla & SpaceX duties. Wouldn’t wish that pain on anyone,” Musk wrote. “Twitter still has challenges, but is now trending to breakeven if we keep at it. Public support is much appreciated!”

In November 2022, Musk said Twitter was losing more than $4 million per day, and that was one reason for laying off a large number of employees in October 2022, along with slashing many corporate perks, including free lunches, home internet, day care, wellness programs, and training and development to rein in costs.

During a Twitter Spaces discussion on Dec. 21, 2022, Musk revealed that when he acquired Twitter in late October 2022 for $44 billion, the business was headed toward a negative cash flow of $3 billion per year.

That’s why he was “cutting costs like crazy,” Musk said. For 2023, the billionaire entrepreneur exuded hope that the company’s financials would take a turn for the better.

“With the changes that we’re making here on massively reducing the burn rate and building subscriber revenue, I now think that Twitter will, in fact, be OK next year,” Musk said. “I think we will be roughly cash-flow break-even. That’s what I expect for next year.”

Revenue Drop

According to data from Standard Media Index, advertising spending on Twitter dropped by 71 percent in December 2022. Musk earlier blamed “activist groups” for the revenue decline.

“Twitter has had a massive drop in revenue, due to activist groups pressuring advertisers, even though nothing has changed with content moderation and we did everything we could to appease the activists. Extremely messed up! They’re trying to destroy free speech in America,” Musk said in a Nov. 4, 2022, tweet.

Twitter introduced several new incentives to attract advertisers, including free ads, allowing greater control over ad positioning, and lifting a ban on political advertising.

Twitter also has massively reduced its workforce to cut costs. When Musk took over, the company had about 7,500 employees. In a Jan. 21 tweet, Musk revealed that the firm had about 2,300 active working employees.

Boosting Revenues

To increase revenues, Musk implemented a paid-in subscription service called “Twitter Blue” that adds a blue checkmark to an account and gives users additional features, such as allowing them to edit tweets within a 30-minute window, use custom app icons, bookmark tweets into folders, and so on.

In the United States, Twitter Blue is available for $8 per month for Web users and $11 per month for Android and iOS users.

Twitter also indicated that it will start charging for access to its Application Programming Interface (API), which is used to create third-party apps by developers. Until now, developers could freely access the API.

The free access ends on Feb. 9.

“Free API is being abused badly right now by bot scammers & opinion manipulators. There’s no verification process or cost, so easy to spin up 100k bots to do bad things. Just ~$100/month for API access with ID verification will clean things up greatly,” Musk wrote in a Feb. 3 tweet.

In January, Twitter auctioned off dozens of appliances, furniture, memorabilia, and other items from the company’s headquarters in San Francisco.

Andrew Moran contributed to this report.