Elon Musk mentioned that Twitter’s funds are enhancing to the purpose that the social media firm may return to posting constructive money circulation subsequent quarter, because the chief government makes an attempt to chop prices, lure again advertisers and navigate the platform’s tech woes.

Talking at a Morgan Stanley investor convention on Tuesday, Musk mentioned that money circulation on the firm he purchased for $44bn final yr would break even within the second quarter, including that it’d even change into constructive in that interval.

He mentioned Twitter’s prices had been projected to run at about $3bn a yr — together with $1.5bn of curiosity funds on the $13bn of debt he used for the acquisition — down from the $4.5bn he mentioned the corporate would have in any other case incurred in 2023.

Nevertheless, Musk acknowledged a “huge decline in promoting”, as entrepreneurs left the location over his plans to chill out content material moderation. In 2021, the final full yr that Twitter printed its revenues, it made $5.1bn.

Twitter generated internet money of $126mn within the first quarter of 2022, which fell to $30mn within the second quarter, its final submitting of monetary outcomes as a listed firm.

Musk has led dramatic cost-cutting efforts so as to wrestle Twitter’s funds beneath management, together with a number of waves of job cuts. However, the shift to a leaner operation has precipitated inside chaos and repeated technical points for customers.

The corporate has additionally confronted mounting scrutiny from regulators over its capability to adjust to social media guidelines. On Tuesday, a report by the Republican-led Home judiciary committee mentioned regulators on the Federal Commerce Fee has beforehand requested Twitter at hand over inside communications referring to Musk because the acquisition, in addition to particulars round its new premium subscription service, Twitter Blue.

In a wide-ranging interview with Morgan Stanley banker Michael Grimes, Musk mentioned he had decreased cloud spending by 40 per cent and brought Twitter from utilizing three to 2 knowledge centres as he tries to enhance its funds. In the meantime, an organization presentation confirmed Twitter’s monetisable every day lively customers numbers had risen to 253mn, its highest ever.

Musk added that some manufacturers had been returning to the platform and he now deliberate to enhance the relevance of promoting, permitting entrepreneurs to focus on customers by key phrases and by curiosity. Twitter was “poorly monetised”, with it making 5 to six cents per hour per consumer, he mentioned, including that he hoped to boost this to a minimum of 15 cents an hour.

“The pure potential right here for Twitter income is gigantic,” Musk mentioned.

Sooner or later, he mentioned he nonetheless deliberate to introduce funds to the platform, including that he believed it was “potential to change into the largest monetary establishment on the earth simply by offering individuals with handy cost choices”.

Grimes, Morgan Stanley’s head of know-how funding banking who has led the preliminary public choices of Uber and Fb, informed Musk throughout the interview that the media had painted an “inaccurate narrative” about his possession of the platform, and that the “worth is evident” concerning the modifications he had carried out.

Morgan Stanley led the syndicate of banks that loaned Twitter $13bn in November, which partly funded Musk’s takeover. Morgan Stanley offered the largest chunk, about $3.5bn. The banks, which additionally embrace Barclays and Financial institution of America, face probably giant losses on the loans as they’ve been unable to promote the debt to traders attributable to uncertainty round Musk’s technique to make Twitter worthwhile and strain from rising rates of interest.