From electric cars, solar energy to space, Tesla (TSLA-US) founder Elon Musk has subverted many industries. With his successful entry into Twitter (TWTR-US), the outside world is paying attention to what he will do. How to transform companies to bring more innovation to the social media industry.
According to the New York Times, Musk recently explained to investors his grand vision for Twitter (TWTR-US), including future development plans and financial goals, such as generating revenue in the next six years. Increase by 5 times the current level, reduce dependence on advertising business, develop subscription and payment services, and manpower recruitment programs.
Revenue to quadruple in 2028, advertising revenue to halve
Musk’s goal is for Twitter to generate $26.4 billion in full-year revenue in 2028, more than quadrupling last year’s $5 billion, according to a report to investors.
In addition, in order to get rid of the dependence on the advertising business, Musk also plans to halve the proportion of advertising revenue from 90% last year to 45%, and achieve $12 billion in advertising revenue and nearly $10 billion in paid subscription revenue in 2028. , and other sources of income include data authorization and other services.
Twitter Blue and the new product “X Subscribers”
Musk plans to increase Twitter’s subscription revenue through services such as Twitter Blue, which he expects to reach $69 million in 2025.
Musk also estimated that Twitter’s new service “X Subscribers” will contribute $47 million in revenue in the same year, but the document did not detail why X Subscribers, Musk only hinted that it would introduce an ad-free experience to Twitter.
Generated $15 million in revenue from payments business
Twitter’s current payment-related business includes the tipping function “Tips” and the shopping function “Shop Module”. Considering that Musk co-founded PayPal in the past, it is speculated that he may introduce the payment function to Twitter.
Musk plans to make Twitter’s payments business $15 million in 2023 and grow to about $1.3 billion in 2028, according to the documents.
Achieving ARPU growth
Through the above development plan, Musk expects that he can increase Twitter’s average revenue per user (ARPU) from $24.83 last year to $30.22 in 2028.
Layoffs and Recruitment Plans
Musk expects the number of Twitter employees to increase from the current 7,500 to 9,225 this year, then decrease to 8,332 next year, and increase to 11,072 in 2025, an increase of two-thirds from the current number of employees.
Musk may start layoffs before recruiting new engineers for Twitter, a person familiar with the matter said. By 2028, Twitter’s stock-based compensation cost is estimated to rise to just over $3 billion from $914 million this year.
Free cash flow (FCF) improved to $9.4 billion
As part of the acquisition plan, Musk previously used Twitter as collateral to obtain a $13 billion loan. In order to repay the loan, Musk hopes to let Twitter achieve $3.2 billion in free cash flow in 2025 and 94 in 2028. One hundred million U.S. dollars.