Elon Musk, the world's richest man, LED electric vehicle company Tesla and Rocket Company SpaceX to reshape at least two industries. Now, his ambition is extending to twitter, which he bought for $44 billion. In recent days, musk has briefed investors on his expectations for twitter and its financial goals.
Revenue will reach $26.4 billion by 2028
Musk announced in the presentation that he would lead twitter to achieve its annual revenue target of $26.4 billion by 2028, up from about $5 billion last year.
Reduce twitter advertising revenue to less than 50% of total revenue
Under Musk's leadership, the proportion of twitter advertising revenue in total revenue will fall to 45% from about 90% in 2020. In Musk's presentation, by 2028, advertising will bring twitter $12 billion in revenue, subscriptions will generate nearly $10 billion in revenue, and other revenue from businesses such as data licensing.
Twitter subscribers will reach 69 million
Musk plans to increase the number of Twitter users through subscription services such as twitter blue. In this service, users can customize their personalized experience on twitter for only $3 a month. In the promotion report, musk predicted that by 2025, twitter blue will have 69 million users.
$15 million from payments
Musk expects twitter to generate $15 million in revenue from a payment business in 2023. By 2028, this revenue will grow to about $1.3 billion. Twitter's payment business now includes tips and shopping, and the current income is almost negligible. There is speculation that musk may introduce the payment function into twitter, considering that he helped promote the digital payment service PayPal.
Increase average revenue per user by $5.39
In the presentation, musk predicted that through many adjustments to twitter, he could increase the average revenue per user from $24.83 last year to $30.22 in 2028. Average revenue per user is a key indicator of the performance of social media companies.
Recruit 3600 people, making the number of employees more than 10000
Musk expects twitter to have 11072 employees by 2025, up from about 7500 at present. This means that Twitter still needs to recruit 3600 people.
But in the meantime, musk expects this number to fluctuate. By 2022, the number of twitter employees will increase to 9225, then decrease to 8332 in 2023, and then increase again. According to people familiar with the matter, musk may lay off staff after taking over twitter before introducing new engineering talents. It is estimated that by 2028, Twitter's stock compensation cost will also rise to more than $3 billion from $914 million in 2022.
Increase free cash flow to $9.4 billion
As part of Musk's acquisition plan, twitter will increase its debt by about $13 billion. But he expects Twitter's free cash flow to grow to $3.2 billion and $9.4 billion by 2025 and 2028, respectively. Free cash flow is a measure of how much money a company has to pay its debts. In the presentation, musk predicted that Twitter's free cash flow will continue to increase even if operating expenses and costs rise.