Elon Musk expects Twitter to be 'cash flow break-even' next year

By Sheila Dang

-Elon Musk mentioned Twitter Inc is now on monitor to be “roughly money move break-even” subsequent yr, because the billionaire proprietor defended his deep cost-cutting measures on the social media platform.

Twitter was beforehand monitoring towards a “unfavourable money move state of affairs of $3 billion per yr” earlier than the associated fee cuts, Musk mentioned on Wednesday in a Twitter Areas audio chat.

Since taking on Twitter on Oct. 27, Musk has laid off 50% of the corporate’s workers and demanded remaining employees decide to lengthy hours and a “hardcore” tradition, prompting extra worker departures. The controversial strikes have rattled advertisers, who contribute 90% of Twitter’s income.

“We've got an emergency fireplace drill on our arms,” Musk mentioned. “That’s the explanation for my actions.”

Twitter at the moment has just a little over 2,000 workers, Musk mentioned on Wednesday.

Musk mentioned Twitter was beforehand on monitor to spend $5 billion subsequent yr. With $12.5 billion in debt because of the acquisition, Twitter was going through a web money outflow of $6.5 billion with income of about $3 billion subsequent yr. That amounted to unfavourable money move of $3 billion, Musk mentioned, including that Twitter has $1 billion in money.

Twitter’s annual income in 2021 was $5 billion and in February, the corporate forecast that 2022 income would develop within the low-to-mid 20% vary.

In the course of the Areas session, Musk mentioned his “primary precedence” was to develop subscriber income so it turns into a significant a part of Twitter’s enterprise. At the moment, corporations are chopping promoting budgets in a weak economic system.

Musk, who additionally runs Tesla Inc, mentioned main advertisers have informed him Twitter adverts have the bottom return on funding out of all social media platforms.

He mentioned one advertiser prompt to him that Twitter ought to show an advert if a person mentions a product in tweet replies.

“I mentioned, yeah, we must always try this,” Musk mentioned.