At 200m Daily Users, Meta’s Threads Will Bring $8bn in Annual Revenue – Analysts

Threads, Meta’s new app is expected to yield billions of dollars in revenue for the social media conglomerate, following its user surge.

The app was launched by Instagram last Wednesday but has racked up 100 million users, becoming the fastest platform to cross the threshold within days. Threads beats OpenAI’s chatbot ChatGPT, which recorded 100 million users two months after launch, in speed.

The record in user numbers is expected to yield huge revenue for its parent company, according to Evercore ISI.

In an estimate reported by Bloomberg, Evercore ISI analysts led by Mark Mahaney said Threads will reach close to 200 million daily active users and generate about $8 billion in annual revenue over the next two years.

Based on data compiled by Bloomberg, the amount represents a portion of the projected average annual revenue of $156 billion that analysts anticipate Meta to generate in fiscal 2025.

While it is lower than Twitter’s $5.1 billion in sales and revenue during its final year as a public company, it still surpasses that figure. Meta, with over 3 billion active users across its various social media applications, amassed approximately $117 billion in revenue last year.

Meta CEO Mark Zuckerberg started a bitter rivalry with Twitter owner Elon Musk by making Threads a text-based social media platform – copycatting Twitter.

Threads’ boom is reportedly reducing Twitter’s user base as several tweeters, who had expressed their displeasure over how Musk runs the microblogging app, say goodbye and sign up on the Instagram-based app. But Twitter CEO Linda Yaccarino said Tuesday that the platform last week had its largest usage day since February, without providing details.

Don’t want to leave you hanging by a thread… but Twitter, you really outdid yourselves! Last week we had our largest usage day since February. There’s only ONE Twitter. You know it. I know it. ?

— Linda Yaccarino (@lindayaX) July 10, 2023

Twitter, which had 237.8 million users as of July 2022, has been beset by controversy since Musk acquired it in October last year. The company is threatening to sue Meta.

KeyBanc Capital Markets Inc.’s Justin Patterson agrees with Mahaney that Threads could bring in several billions of dollars in ad revenue for the Meta. But Patterson admitted that it “will be an immaterial contributor near term as Meta likely focuses on adoption over monetization.”

Meta, which saw a massive decline in revenue in the past two years, has begun to see growth, following changes and new products introduced by Zuckerberg. The company’s stock has more than doubled this year, rising as much as 2.6% to touch a 17-month high in Monday trading.

Months ago, Zuckerberg was quoted to have told employees that there is a need for another real-time conversations platform that is sanely run, throwing a jab at how Musk runs Twitter.

The CEO, who has been very active on Threads since its launch, said on the platform “It will take some time, but I think there should be a public conversation app with 1 billion+ on it. Twitter has had the opportunity to do this but hasn’t nailed it. Hopefully, we will.”

He said last week that Meta intends to achieve its aim by using the same approach for all its products. “… Make the product work well first, and then see if we can get it on a clear path to 1 billion people, and only then think about monetization at that point.”

However, given that OpenAI’s ChatGPT traffic has begun to drop off, Mahaney doubts if Threads will maintain the momentum for a long time.

“It will be interesting to see if Threads can maintain a reasonably robust growth rate and keep users engaged without meaningfully cannibalizing engagement on Meta’s other platforms, Facebook and Instagram,” Mahaney wrote in a research note.

Threads users mostly come from Instagram, which has more than 500 million users.