X Posts Higher Sales As Musk Presses Costly Overhaul

(MENAFN- The Arabian Post)

Sales at Elon Musk-owned social network X rose during the third quarter, offering a measure of momentum for a platform still absorbing heavy costs tied to restructuring, infrastructure upgrades and efforts to revive advertiser confidence after a turbulent period.

The company, formerly known as Twitter, recorded higher revenue compared with the same quarter a year earlier, according to people familiar with its financial performance. The improvement reflects stronger advertising bookings from select global brands, growth in subscription products and a push to monetise data and premium features, even as overall spending remains elevated.

The rebound in sales comes amid a prolonged turnaround that has reshaped nearly every part of the business since Musk completed the acquisition in late 2022. Thousands of staff were laid off in successive rounds, office footprints were reduced across several markets and internal systems were reworked to cut fixed costs. While these moves lowered the company's baseline expenses, they also triggered one-off charges and ongoing costs linked to severance, litigation, cloud services and technical migration.

Advertising remains the central driver of X's revenue, and the platform's relationship with marketers has been under strain. Major advertisers paused or reduced spending following concerns over content moderation, brand safety and changes to platform policies. During the third quarter, some advertisers returned with limited campaigns, drawn by improved controls, updated brand-safety tools and more direct engagement from X's sales teams. Executives have told partners that ad performance metrics and targeting capabilities have stabilised after earlier disruption.

Beyond advertising, Musk has pushed to diversify income streams. Subscriptions tied to premium verification, creator tools and enhanced visibility have generated incremental revenue, though they remain a smaller share of overall sales. The company has also explored licensing access to its data for artificial intelligence training and analytics, an area that has attracted interest from technology firms seeking large-scale, real-time text data.

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Costs, however, continue to weigh on the business. Interest expenses linked to the debt used to finance the acquisition remain substantial, placing pressure on cash flow. Infrastructure spending has risen as X invests in data centres, security and reliability following service outages and technical incidents. Legal costs associated with disputes involving former employees, landlords and vendors have also persisted.

Musk has repeatedly argued that the restructuring was necessary to ensure the platform's long-term survival, describing earlier cost structures as unsustainable. He has said X aims to become a broader“everything app”, combining social media with payments, video, shopping and creator-driven commerce. During the third quarter, the company continued testing features related to long-form video, live streaming and payment functionality in selected markets, although these initiatives require further investment before they can materially contribute to revenue.

Industry analysts note that the sales increase, while notable, does not yet signal a full recovery. Advertising demand across the social media sector has been uneven, influenced by macroeconomic uncertainty, shifting consumer behaviour and competition from platforms such as Meta's Instagram and TikTok. X faces the added challenge of rebuilding trust with advertisers while retaining user engagement amid frequent product changes.

User activity on the platform has shown mixed trends. Time spent on video content has increased, according to internal metrics shared with partners, while engagement around news, politics and real-time events remains a differentiator. At the same time, changes to verification and visibility rules have altered how content circulates, drawing criticism from some creators and publishers who say reach has become less predictable.

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