X, formerly Twitter, is on a path to profitability, according to CEO Linda Yaccarino. Speaking at Vox Media’s Code Conference, Yaccarino confidently stated, when pushed, that X is poised to turn a profit by early 2024 – a significant declaration considering X’s history of financial challenges (especially since it was acquired by Elon Musk).
X’s journey to profitability is a long one. The company, which had operated for 13 years without an annual profit, has struggled to maintain consistent profitability over the years. Moreover, it recently went through a significant transition, being acquired by Elon Musk just a year ago. Yaccarino’s recent statement aligns with her previous comments about X’s financial outlook.
In August, she had mentioned that X was approaching breakeven in terms of operational run rate. And earlier in July, a leaked memo revealed that X’s usage was at an all-time high. According to Yaccarino, X had more than 540 million global users, though she declined from going into the specifics even after being questioned repeatedly. She added that the key metrics around time spent on X were “trending very, very positively” but did not provide any specifics.
“Now that I have immersed myself in the business, and we have a good set of eyes on what is predictable, what’s coming is that it looks like in early ’24, we will be turning a profit,” Yaccarino said at the Code Conference. “The velocity of change and the scope of ambition at X really does not exist anywhere else,” she added.
One crucial indicator of X’s resurgence is the return of advertisers. Yaccarino, in the interview, stated that 90% of the top 100 advertisers have come back to the platform in the last twelve weeks alone. For reference, numerous advertisers had abandoned ship owing to Twitter’s loosened content moderation policies at that time, which could result in their advertisers showing up next to particularly sensitive content. And considering concerns of a rise in antisemitic content on X’s micro-blogging site in recent times, their fears are not unfounded.
While X’s financial prospects are brightening, the road to profitability hasn’t been without its challenges. To cut costs, the company significantly reduced its staff from 8,000 to about 1,500 employees. However, a contentious issue remains regarding unpaid severance to laid-off employees, along with several lawsuits related to unpaid rent for office space in various countries. Moreover, X has faced controversies related to the content on its platform, including antisemitic content. Elon Musk’s recent public spat with the Anti-Defamation League (ADL) over a steep drop in ad revenue due to the ADL’s actions has further muddied the waters.