Elon Musk wants to quintuple Twitter’s revenue, but not from advertising

Elon Musk’s takeover of Twitter received a lot of publicity, but until now, his plans to quintuple revenue were kept secret.

A copy of his presentation to the board and major shareholders was obtained by the New York Times. Musk, ever the big thinker and amongst the most ambitious businessman, wants to fundamentally change the business.

The key points in the presentation are:

Quintuple revenue to $26.4 billion by 2028.

Musk believes that he can help the company grow its revenue to $26.4 billion (25 billion euros) by 2028. That’s a staggering quintuple increase from last year’s $5 billion (4.74 billion euros).

Cut Twitter’s reliance on advertising

Musk wants to cut the social media giant’s reliance on advertising to below 50 per cent of revenue. That would see the company’s reliance on advertising fall from 90 per cent in 2020 to around 45 per cent.

Earn $15 billion from a payments business

Currently, the company earns very little from payments. Musk is looking to raise $1.3 billion (1.23 billion euros) annually from payments, possibly through a replication of what he did with PayPal.

Increase average revenue per user

Musk believes he can raise the revenue per average user from the current $5.39 (5.1 euros) to $30.22 (30.20 euros) by 2028. Some of this revenue will come from a pay service that will allow users to tailor their experience on the app.

Grow the number of users to 931 million

Currently, 217 million people use the social media platform, but Musk believes he can grow that to 931 million. The bulk of the growth will come from the main platform with the balance, around 250 million, coming from new services.

Introduce a mysterious product by 2028

The presentation refers to a new product, dubbed X. However, it does not provide any details other than the expectation of attracting 104 million new users by  2028.

Change the team

Musk has indicated that the company will need to lose thousands of its current team, which would be replaced by people with different skills, eventually pushing staff numbers from the current 7,500 to over 11,000.

Increase returns for shareholders

No bid would be accepted without a sweetener for shareholders, with Musk suggesting this could cost the company an extra $3 billion (2.8 billion euros) annually.

Generate cash

Musk’s buyout plan will add around $13 billion in debt, but he expects that to be covered by the cash the business generates. The amount of “free cash” he predicts will rise to around $9.4 billion (8.9 billion euros) by 2028.

The takeover of Twitter by Elon Musk is being challenged in the courts as not all shareholders as happy with his plans to quintuple Twitter’s revenue, or to change how the organisation operates.

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