We’ve been hearing from multiple sources that Twitter will bring in $1 billion in ad revenue in 2013. The company as of now, according to these sources, has a $1 billion revenue run rate, which means that if you take its current monthly revenue and 12x it will hit the big $1 billion mark by the end of next year.
In addition to us hearing this anecdotally, the New York Times’ Nick Bilton breezily tossed off the milestone in his Instagram article over the weekend, “Twitter is expected to make $1 billion in revenue next year.” Oh really?
The only issue we’re finding with this factoid is what exactly is meant by next year? While Bloomberg is reporting that the company will hit the milestone in 2014, we’ve heard from multiple sources that Twitter expects $1 billion in revenue by the end of 2013 specifically. So what gives? Maybe because it’s the end of 2012 people are getting sloppy with numbers and dates?
We’ve also heard the conflicting information that Twitter’s revenue estimations are more along the lines of $600 million – $650 million for 2013, and the actual $1 billion in revenue will be an end of 2014 goal. This is in accordance with eMarketer’s modest estimates, which are based on the company’s revenue as of this past September. What is not clear is exactly how much the company’s ad revenue growth has increased since the last time someone figured out a run rate, i.e. September 2012. I would guess a lot.
What we are confident about is that Twitter brought in $350 million in revenue in 2012. And we’re hearing that the revenue team, while not cash flow positive just yet, beat their Q2 2012 goals in Q1 2012. So they’re killing it.
Anyway, the big deal here is that a) around 50 percent of this revenue is coming from mobile ads and that at some point in the next two years, at this growth rate, the company will have substantial enough revenue to justify an IPO. Or at least a more successful IPO.