Musk: "Twitter to Break Even in Q2 This Year"

"Advertising Sees a Large-Scale Decline"

Elon Musk stated that Twitter could break even on a cash flow basis in the second quarter of this year.

On the 7th (local time), Musk participated in the Morgan Stanley Conference held in San Francisco, USA, and said, "Financial structure is improving through cost reduction, efforts to bring advertisers back, and resolving technical issues on the platform."

He particularly emphasized that cloud spending was reduced by about 40%, and by closing one of the three data centers, significant cost savings were achieved. Annual expenses are expected to total $3 billion, including $1.5 billion in interest repayment costs.

[Image source=Yonhap News]

However, he acknowledged that Twitter's advertising has significantly decreased. Twitter's advertising revenue was $5.1 billion in 2021, accounting for 89% of total revenue, making it a major source of income.

But since Musk acquired Twitter in October last year, the advertising revenue base has been severely shaken. Citing cost reduction, he has cut Twitter's entire workforce eight times from the acquisition until now. He suspended numerous accounts of journalists from major media outlets, and two months after acquiring Twitter, he put his own CEO position up for a vote on whether to resign, among other erratic actions. Due to 'owner risk,' advertisers have continued to leave, putting Twitter in a management crisis.

Musk said, "Some brands are returning to the platform," and added, "We will improve so that companies can conduct targeted marketing based on users' keywords and interests." He also mentioned that currently, Twitter earns 5 to 6 cents per user per hour, which is very poor profitability, and plans to raise this to at least 15 cents per hour.

He also mentioned that Twitter's daily user count is 253 million, the highest ever.

Musk stated, "The natural potential for Twitter's revenue is enormous," and "The plan to introduce a payment system on the platform is still valid." He added, "Simply by providing people with a convenient economic system, there is a possibility of becoming the world's largest financial institution."