The platform is on its way to making a profit by early next year, stated X CEO Linda Yaccarino.

Sounds great when viewed in a broader context, since the company once known as Twitter has never at any point in its 17-year history managed to report profitability. But X's new approach, accompanied by massive cost-cutting, could now have it finally on track to establish firmer footing-at least going by Yaccarino estimates.

Yaccarino was speaking during her presentation this week as the headline guest at Vox Media's Code Conference in California. Several attendees have described Yaccarino's appearance as stand-offish, even confrontational at times, particularly when she was pushed on X's performance, and specific engagement stats. But according to Yaccarino, X is going well, despite having no exact targets or data in mind.

Yaccarino was also asked about Elon Musk's announced plan reportedly to introduce a charge for all users in the app-a proposal that Musk has at least partially denied.
Last week, during an interview with Israeli Prime Minister Benjamin Netanyahu, Musk said:

The single most important reason we're moving to having a small monthly payment for use of the X system is that this is the only way I can think of to combat vast armies of bots. So, since a bot costs a fraction of a penny, or a tenth of a penny, but if somebody has to pay even a few dollars or something, some minor amount, the effective cost of bots is very high, and then you also have to get a new payment method every time you have a new bot.

So, then, while Musk did not come out and say precisely that X will start charging all its users anytime soon, it is sort of inferred, though Musk has previously stated that an industry shift to paid social is "inevitable," and eventually, in his mind, "paid account social media will be the only social media that matters.".

However, in combination, it does seem as though X floated the idea of a complete app paywall, and Platformer did report last year that Musk had discussed this internally as a possibility.

However, he never refused to say this outright, though he did re-share a post which clarified that he only said there will be a cheaper version of X Premium offered, but not that all users would have to pay to use the app.

He has not denied it, at least, just clarifies that it is not what he said-all users have to pay, as some reported.

And evidently, Yaccarino wasn’t 100% clear on this either.

When asked by CNBC's Julia Boorstin whether X charges will charge a fee to all users, Yaccarino first asked Boorstin to repeat the question, then inquired if Elon had ever said that this would be the case, or if he'd even thought about it as an option. Boorstin replied by asking Yaccarino if she had spoken to Musk about the proposed plan, to which Yaccarino replied that she speaks to Musk about everything. She then didn't say anything more to clarify the information.

It was such an odd exchange that it seemed as though Yaccarino did not know how certain he was about the prospect of such and didn't want to go on record denying it in case Musk wanted to see about implementing it.
One that many have pointed out as being one example of Yaccarino who, essentially, has not much to call his own shots on, as Musk actually calls all the shots, even on ad policies that appear to be Yaccarino's focus.

Still, Yaccarino reports advertisers are coming back to X, with 90% of the top 100 advertisers now resuming ad spend despite concerns around Musk's newly enforced policies on free speech and divisive content.

In a second interview with Ben Shapiro, Elon similarly defended the way his platform handles anti-Semitic content, noting that even though third-party reviews have reported an increase, anti-Semitic posts within the app are actually down 30% since he took control.
Musk also elaborated a bit on how X currently polices such content, but also in doing so highlighted the problems this poses while taking a more free speech-based approach. In that regard, Musk said, he thinks this kind of content being spread more would in some way be beneficial, because then others can also challenge and trounce such statements. But it may also mean that X is tolerating more such material on the app perhaps because X is changing its view of what qualifies as "hate speech" in this context.

As we’ve noted before, while X claims that hate speech is down in the app, it’s actually altered how it assessed such, based on an independent assessment of slur terms in context, which found that the vast majority (86%) of slurs posted in the app are actually used in a non-harmful way. Which seems questionable, but that’s what X is going with, which may put its 30% reduction claim into some context.

That may be what puts X on a collision course with groups like the Anti-Defamation League (ADL), which, in its assessment, has found that hate speech is rising under Elon's watch. It seems that to a large extent, each group is likely to be assessing such in a different way, which may explain why X's data is at odds with an external analysis.

Interestingly, Elon also challenged any one who can contradict its data in offering the proof. But X could do that too by sharing its own full studies which support its own findings.

Within that, and amidst Elon's own increasingly political posts, Yaccarino is having to win over ad partners, and reassure them that brand safety remains a core focus for the app. Which, based on her assessment of future profitability, does seem to be working, though it remains a tough position.

And while X may eventually become profitable, its actual intake will probably be much less than it has ever been before, since it's also cut its outgoing expenses by such a big margin. Culling 80% of staff, eliminating its data centers, and closing regional offices, and upping the price of its API access, will collectively have taken a big hit out of its overheads.

In X's final complete performance update in Q2 2022, the company had $US1.18 billion total revenue and total costs were at $US1.52 billion. Staff costs at that stage were $950 million, so clearly, X is already likely to be way down on that expense reducing its profitability target considerably.

At a rough estimate, considering all the cuts, X is expected to make approximately $600 million in the first quarter of next year to reach profit. So while getting back into the money must be the obvious, it is also worth noting here the variance in comparison with where the company stood right before the takeover.

Essentially, it would be a very bad sign for X's growth plans if it was anything less than this.

But then again, that doesn't even take into account X's debt repayments, which Musk incorporated into the company—not his own personal stake—as part of his financing strategy when he bought the app. These payments are said to be around $300 million per quarter alone so that will likely cause another serious spanner in the works. That, really, will be the hardest piece for X to digest, though Yaccarino is said to be meeting with bankers next week to discuss X's debts. Perhaps that will allow X to stretch these payments out over a longer period, and lower this piece.

But in reality, nobody really knows what to believe about X at this point because even Elon and his own CEO don't seem to be able to get their story straight between themselves. Yet, by and large, they do seem to be in alignment, which could mean that X will return to profit, sometime soon.

And while the expectations for that actual profit itself might be kept low, it could give it a firmer foundation for the platform to really begin its "everything app" push, in a more sustainable and streamlined manner.