X’s Ad Revenue Shrunk in Q2 2025

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It seems like X is still struggling to boost its revenue intake, despite an increase in interest following last year’s U.S. election.

Earlier this year, reports suggested that Elon Musk’s increased political influence, as well as Donald Trump’s election victory, had prompted many big-name advertisers in particular to rethink their assessment of X, and resume ad spend in the app.

That resulted in a rise in the platform’s ad revenue in the first quarter of 2025, and potentially a sign of things to come. But according to new reports, that momentum hasn’t been sustained.

As reported by Bloomberg:

“The social network, formerly known as Twitter, posted about $707 million in revenue in the three-month period through June 30, a 2.2% drop compared to the first three months of the year, according to people briefed on the numbers.”

Bloomberg notes that this is still a 20% increase on 2024, so the result is still solid from a broader recovery standpoint.

But the numbers show that X is still performing well under expectation, and is failing to resonate with the broader market.

For context, in 2022, the final year before Elon took over at the app, Twitter generated $4.4 billion in revenue, predominantly through advertising. In 2023, Musk’s first year at the company, that declined to around $3.4 billion, which then dropped to $2.6 billion in total net revenue last year.

So X’s revenue intake is steadily declining, though for 2025, the platform is still on track to reach around $2.9 billion in total revenue, with its expanded subscription and promotion packages contributing to that slightly higher mark.

But with Elon also saddling the app with additional debt servicing costs (around $1.2 billion annually), the platform remains close to break even, and is nowhere near Musk’s original forecasts for the app, which he projected would be bringing in $26.4 billion in total revenue by 2028.

Of course, a lot of Musk’s early projections were based on a massive increase in sales of in-app subscriptions, and the launch of his in-stream payments initiative, neither of which has gone to plan.

X Premium, while bringing in an estimated $200 million in annual revenue, was Musk’s big hope for financial independence, and reducing the company’s reliance on ad dollars, and thus advertiser whims. But its subscription offerings clearly haven’t resonated with most users, while the rollout of “X Money” hasn’t even happened yet, with the project still being held up by regulatory approvals in U.S. states.

As such, X remains reliant on ad spend, and has implemented more initiatives to re-focus on this element.

X has also diversified its income streams by merging with xAI, which ensures that xAI can funnel funds to X if needed.

According to current estimates, xAI is on track to generate around $500 million in revenue in 2025, rising to $2 billion in 2026, so the merger will ensure that X the app remains solvent while it regains its ad footing.

The question then, however, is whether X can actually regain advertiser confidence, and win back a significant portion of digital ad share.

Because the data shows that X usage is declining, as its now main rival Threads continues to expand. That doesn’t bode well for its chances, and while xAI funding can help, at some stage, Elon and Co. will also have to assess the value of X within that structure.

I mean, it makes sense that X is crucial to xAI, as it uses X posts as its data source to power its responses, which is a crucial benefit of Elon’s xAI project. But if xAI doesn’t meet its sales projections, and X’s ad sales don’t ramp up, the whole project could be in a difficult spot.

The popularity of AI, as well as broader trust in Musk’s vision, seems likely to keep things rolling for now, regardless of X’s own performance. But it is worth noting the precariousness of X Corp in general, even as it spends big on AI projects.