It's looking all doom and gloom for X on the financial front

Elon Musk’s takeover of Twitter, now rebranded as X, was hailed as a game-changer for the social media platform. But in 2024, the financial outlook for X is anything but optimistic. The company’s revenue is plummeting faster than a tweet lost in a feed, and with advertisers fleeing the platform, Musk is facing what might be one of his biggest business challenges yet.

X’s financial woes became evident when its revenue in India — a market Musk once claimed was the third-largest for the platform — took a nosedive, falling by 89.8% in the fiscal year ending March 2024. According to regulatory filings, revenue plunged from $24.7 million to a mere $2.51 million. Expenses were slashed dramatically too, shrinking from $20 million to $2.2 million. Despite these cost cuts, X reported a drastically reduced profit of $380,000, down from $3.62 million in the prior year.

While this sharp decline was specific to India, the story is echoed across the globe. The platform is struggling to retain advertisers, and this is becoming a recurring theme as more data comes to light.

Back in December 2023, Musk admitted that ad revenue on X was already falling behind competitors like Facebook and Instagram. The numbers back him up. By March 2024, ad revenue was officially in freefall. Things reached a boiling point in August, when Musk’s X even went so far as to sue major global advertisers, accusing them of a revenue boycott. The lawsuit came amid a wave of advertiser skepticism, driven by Musk’s erratic management style and controversial moves.

To make matters worse, Musk had hoped that subscription revenue from users paying for premium features like the much-publicized “blue tick” verification would shore up the business. However, new data from October 2024 revealed that subscription growth was still an uphill battle. This piled more pressure on X especially since multiple reports already indicate that major companies had pulled their ad budgets from the platform.

By August 2024, X’s revenue decline had hit such alarming levels that it seemed Musk was scrambling to plug the leaks. In response to the advertiser exodus, X recently rolled out new monetization options for creators, hoping to lure influencers with revenue share payouts. But the payout structure itself turned out to be another headache, with creator revenue shares shrinking, adding to the platform’s woes.

In another bizarre twist, as X’s value continued to drop (recently plummeting by 84%, according to Fidelity Investments) billionaire Mark Cuban expressed interest in buying the platform from Musk. Cuban, always an opportunist, saw the potential in acquiring a struggling brand, but Musk has yet to bite.

And just when it seemed things couldn’t get worse, X recently found itself in trouble with the EU for violating the Digital Services Act. The platform’s apparent inability to meet regulatory standards added to the chaos, resulting in potential fines that could further damage the company’s finances.

However, amid the gloom, a curious piece of good news emerged. EU officials determined that X is “not as important” as rival platforms like Facebook and TikTok, effectively relieving Musk of some regulatory pressure. While this might sound like a silver lining, it underscores how far X has fallen in influence.

Looking ahead, 2024 might bring even more bad news for Musk. According to projections, X is likely to post significant financial losses by the end of the year. For a platform once considered a global powerhouse in the social media space, it’s hard to believe just how quickly things have unraveled.

The writing on the wall is clear: X is in financial turmoil. Despite Musk’s best efforts to turn things around — whether through lawsuits, layoffs, or slashing expenses — the platform’s future is murky. In a desperate attempt to revive ad revenue and user engagement, X has launched new features and tweaked its monetization strategies, but the results remain lackluster. With fewer advertisers, declining user interest, and mounting pressure from regulators, X’s outlook remains bleak.

So, is there hope for X to rise from the ashes? Or will it become yet another cautionary tale of what happens when bold ideas meet hard financial realities? Only time will tell, but for now, it’s looking all doom and gloom on the financial front.