Elon Musk has never been accused of dreaming small. He’s reinvented at least two industries with Tesla, his electronic car company, and SpaceX, his rocket company — and now his ambitions continue with his $44 billion Twitter acquisition.
Mr. Musk, the world’s richest man, has given a promotion to investors in recent days outlining his grand – and some might say incredible – plans for Twitter and his financial goals. The New York Times got the presentation. Here’s a sneak peek at what Mr. Musk sees for the social media service in the coming years.
Fivefold revenue to reach $26.4 billion by 2028.
In his promo, Mr. Musk claimed he would increase Twitter’s annual revenue to $26.4 billion by 2028, compared to $5 billion last year.
Reduce Twitter’s reliance on ads to less than 50 percent of revenue.
Under Mr. Musk, ads will fall to 45 percent of total revenue, down from about 90 percent in 2020. In 2028, ads will generate $12 billion in revenue and about $10 billion in subscriptions, according to the document. Other revenue may come from the business such as data licensing.
Generate $15 million in revenue from push business.
Twitter will bring in $15 million from the payments business in 2023, according to the document, which will grow to about $1.3 billion by 2028. The company’s payments business today, which includes tipping and shopping, is negligible. There has been speculation that Mr. Musk might offer payment capabilities to Twitter since he helped popularize PayPal, the digital payments service.
From the review: Twitter Elon Musk
Commentary by Times Opinion writers on the billionaire’s $44 billion deal to buy Twitter.
Increased average revenue per user by $5.39.
With all of these changes, Mr. Musk expects to be able to raise Twitter’s average revenue per user – a key metric for social media companies – to $30.22 in 2028 from $24.83 last year, according to the document.
Reach 931 million users by 2028.
Mr. Musk expects the total number of Twitter users to grow from 217 million at the end of last year to nearly 600 million in 2025 and 931 million six years from now. Most of that growth will come from the ad-supported business on Twitter, including Twitter Blue, for which users pay $3 per month to customize their experience on the app. According to the presentation platform, Mr. Musk expects 69 million users of Twitter Blue by 2025 and 159 million users in 2028.
You have 104 million subscribers to mysterious X by 2028.
Musk’s overall user estimates include what appears to be a subscription to a new product called X, which will have 104 million users in 2028, according to the document. The document did not say what the X Subscribers are, but Mr. Musk has hinted at offering an ad-free experience on Twitter. Product X Subscribers appear on the presentation platform in 2023, with an expected nine million users in its first year.
Employed 3,600 employees – after laying off hundreds.
By 2025, Mr. Musk expects Twitter to have 11,072 employees, according to the document. That would be up from about 7,500 today.
But in between, Mr. Musk expects the number to fluctuate, rising to 9,225 employees in 2022, then declining to 8,332 employees in 2023 before rising again. Mr. Musk is likely to lay off workers as part of his tenure, before bringing in new talent in engineering, a person familiar with the situation said. Inventory-based compensation costs are also expected to rise to just over $3 billion by 2028, from $914 million in 2022.
Free cash flow raised to $9.4 billion.
Twitter will add about $13 billion in debt as part of Mr Musk’s buyout plan. But he expects to pay off that debt as free cash flow — a measure of how much money a company has to service its debt — set to grow to $3.2 billion in 2025 and $9.4 billion in 2028, according to the presentation platform. According to the document, free cash flow will rise even as operating expenses and costs will also rise.