Understand Elon Musk’s Twitter Plans

Elon Musk was never accused of dreaming small. He has reinvented at least two industries, with Tesla, his electronic vehicle maker, and SpaceX, which makes rockets — and now his ambitions have expanded to incorporate the $44 billion acquisition of Twitter. ).

Musk, the richest man on the planet, gave a presentation to investors a few days ago outlining his grandiose plans – some would call them unbelievable – for Twitter, and his financial goals. The New York Times obtained a copy of the presentation. Below is a glimpse of what Musk intends for the social media service in the coming years.

Quintuple revenue to $26.4 billion annually by 2028

In his presentation, Musk said he would take Twitter’s annual revenue to $26.4 billion by 2028, up from $5 billion last year.

Reduce Twitter’s reliance on advertising to less than 50% of its revenue

Under Musk, advertising’s share of total Twitter revenue would drop to 45%, from around 90% in 2020. By 2028, advertising would generate $12 billion in revenue and subscriptions nearly US$ 10 billion (R$ 50.7 billion), according to the presentation. Other revenues would come from businesses like data licensing.

Produce $15 million in revenue from a payments service

Twitter would produce $15 million in revenue from its payment service in 2023, according to the document, and that amount would grow to $1.3 billion. in 2028. The company’s payments business today, which includes tips and groceries, is negligible. There has been speculation that Musk may introduce payment capabilities to Twitter, as he has helped popularize the digital payments service PayPal.

Increase average revenue per user by $5.39

With all of these changes, Musk predicts he could push Twitter’s average revenue per user — a key indicator for social media campaigns — to $30.22 in 2028, up from $24.83 ($24.83). $125) last year, according to the filing.

Reach a total of 931 million users in 2028

Musk anticipates that total Twitter users will grow from nearly 217 million at the end of last year to close to 600 million in 2025 and will reach 931 million within six years. Most of that growth comes from Twitter’s ad-supported businesses, including Twitter Blue, where subscribers pay Twitter $3 a month to personalize their app experience. According to the presentation, Musk predicts that Twitter Blue will reach 69 million subscribers in 2025 and 159 million in 2028.

Have 104 million subscribers to the mysterious X service by 2028

Included in Musk’s estimates for total users appear to be subscribers to a new product called X, which would have 104 million subscribers by 2028, according to the document, which does not detail what that X program would be. (However, Musk hinted that there would be an ad-free version of Twitter.) The X Subscribers product appears from 2023 in the presentation, with nine million users anticipated for its first year.

Hire 3,600 employees – after laying off a few hundred people

By 2025, Musk anticipates that Twitter will have 11,072 employees, according to the document. Today the company employs 7,500 people.

But from here to there, he expects the number to fluctuate, rising to 9,225 employees in 2022, then dropping to 8,332 in 2023, before rising again. Musk is expected to lay off staff as part of his takeover, before bringing in new talent into engineering, a person familiar with the situation said. Equity compensation costs are also expected to rise to just over US$3 billion in 2028 from US$914 million in 2022.

Raise free cash flow to $9.4 billion

Twitter will increase its debt by about $13 billion as part of Musk’s takeover plan. But he anticipates settling that debt, as free cash flow – an indicator of how much money the company has to keep its debts up to date – is expected to grow to $3.2 billion (R$ 16.2 billion) in 2025 and the US$9.4 billion (R$47.6 billion) in 2028, according to the presentation. Free cash flow would grow despite the expected increase in operating expenses and costs.

Translation by Paulo Migliacci