X's ad business has shrunk dramatically, new earnings reveal

Advertising on X has shrunk considerably since Elon Musk bought the platform, according to figures disclosed in SpaceX's first quarterly earnings report as a public company.

The report shows X generated $367 million in ad revenue from April to June. That is higher than the $343 million seen in the previous quarter, but notably lower than the $426 million recorded in the same period last year.

The decline becomes even clearer when compared to 2022. In the second quarter of that year, when Twitter still published its own financial results, advertising revenue stood at $1.08 billion. Since then, Musk has reorganized the business, cut thousands of jobs, and publicly clashed with advertisers over content moderation concerns. At one point he told ad buyers to stay away from the platform in an expletive-laden outburst. He also filed lawsuits against advertisers who paused their spending.

X has pushed hard to sell premium subscriptions, including a Premium+ tier that removes ads entirely. The company did not disclose subscription revenue or daily active user numbers.

On Tuesday's analyst call, SpaceX CFO Bret Johnsen attributed the modest quarterly improvement to an "overhauled" ad technology platform. The ad business was mentioned only once during the hour-long call.

X executives have claimed that most major advertisers have returned. In January, the company's ads boss told Digiday that 97 of the top 100 advertisers had returned, and some were spending more than before Musk arrived. Even if those claims are accurate, advertising now accounts for a relatively small portion of SpaceX's overall revenue.

SpaceX reported $2.2 billion in revenue from its AI division, which is mostly tied to its partnership with Anthropic, $4.3 billion from Starlink, and $962 million from its space division. That puts X's entire ad business well behind the company's other major income streams.