According to The Guardian, X has now admitted that its UK revenues and profits nosedived in 2023, the year following Elon Musk"s takeover and the platform"s rebranding from Twitter.
According to documents filed to Companies House, revenue dropped a staggering 66% from £205.3 million in 2022 to just £69.1 million. The company"s profits didn"t fare much better, slipping from £5.6 million to £1.2 million, while pre-tax profit was down by nearly three-quarters.
X blamed the collapse on a familiar villain: advertisers walking out. The filings mention a decline in ad spending driven by worries about "brand safety and/or content moderation."
This echoes the bigger picture we"ve seen globally. Ever since Musk took the reins, ad revenue has been shaky. At one point, he even threatened to name and shame fleeing advertisers.
Thank you.
— Elon Musk (@elonmusk) November 4, 2022
A thermonuclear name & shame is exactly what will happen if this continues.
In addition to that, X launched lawsuits against watchdog groups and critics who scrutinized content moderation on the platform.
It"s not just revenue and profit that tanked. Headcount did, too. The number of employees dropped to 114 from 399, and most of those who were let go were in research and development.
What"s strange is that even while X UK was in freefall, the larger company"s valuation was being propped up, thanks in no small part to Musk"s side hustle, xAI.
Recently, that lab bought X for $33 billion, and suddenly, the value looked like it had snapped back close to Musk"s original $44 billion purchase price. It"s also worth noting that Twitter UK Ltd was nearly struck off the register last month for not filing its accounts on time.
The company"s own filing tried to spin things forward-looking, saying it was "taking corrective measures" by rolling out brand safety tools, putting more into "platform safety and content moderation," and aiming to "educate advertisers" on all of that.