In the second quarter of 2025, Elon Musk’s social-media platform X, formerly known as Twitter, experienced a notable contraction in advertising revenue, signaling ongoing challenges in stabilizing its business model amid fierce competition and advertiser hesitancy. According to data released by research firm Sensor Tower and reported in Social Media Today, X’s ad sales dipped by 2.2% from the previous quarter, totaling around $707 million. This marks a sequential decline despite a roughly 20% year-over-year increase, highlighting a slowdown in the momentum that had built earlier in the year.

The figures underscore a broader struggle for X, which has been grappling with advertiser pullbacks since Musk’s acquisition in 2022. While the platform saw its first annual ad revenue growth in 2025, projected at 16.5% to reach $2.26 billion as per eMarketer insights shared in eMarketer, the Q2 results suggest that sustaining this recovery is proving elusive. Factors such as increased competition from rivals like Meta’s Threads and advertiser concerns over content moderation have contributed to this volatility.

A Cooling Momentum After Political Surge

Recent reports indicate that X benefited from a temporary boost in ad spending tied to U.S. political events earlier in 2025, but that hype has faded, leading to the Q2 dip. Posts on X itself, including those from business analysts, reflect sentiment around this decline, with users noting market conditions and platform changes as key culprits in reduced advertiser demand. For instance, real-time discussions on the platform highlight vulnerabilities in X’s reliance on event-driven revenue spikes, which fail to translate into consistent growth.

Moreover, under the leadership of departing CEO Linda Yaccarino, X had shown signs of improvement, with U.S. ad spending up 62% year-over-year in the first half of 2025, as detailed in a Yahoo Finance analysis. Yet, the Q2 numbers reveal that these gains were not enough to offset broader pressures, including a shrinking daily active user base and competition eroding market share.

Historical Context and Future Projections

Looking back, X’s ad revenue has been on a rollercoaster since Musk’s takeover. Bloomberg News reported in 2023 that sales slumped to $2.5 billion, a sharp drop from pre-acquisition levels, per Reuters. Fast-forward to 2025, and while eMarketer forecasts a mild turnaround with revenues potentially reaching half of 2021 peaks, the Q2 shrinkage—evident in recent TechJuice coverage of a “sharp dip” amid earlier momentum—suggests headwinds persist.

Industry insiders point to strategic missteps, such as inconsistent verification systems and a proliferation of low-quality accounts, which have deterred premium advertisers. As one X post from a business update account noted, the platform’s earnings are impacted by these internal changes, echoing broader web searches on ad performance challenges.

Competitive Pressures and Strategic Shifts

Competition is intensifying, with platforms like Threads reporting higher growth rates in daily usage, as covered in a July 2025 TechCrunch article. This has forced X to explore alternative revenue streams, including API fees and subscriptions, which have shown promise but remain secondary to ads.

For X to rebound, experts suggest a renewed focus on brand safety and user engagement. Recent news from iNewsroom and First Squawk on X’s Q2 sales dip versus Q1 underscores the difficulty in sustaining post-political surges, with quarterly revenues highlighting the need for diversified strategies.

Implications for the Broader Industry

This Q2 performance raises questions about X’s long-term viability in a crowded social media arena. While the 20% year-over-year growth is a positive signal, the quarter-on-quarter decline, as analyzed in TechJuice, points to underlying issues that could affect investor confidence.

Ultimately, as X navigates these challenges, its ability to innovate and rebuild advertiser trust will determine whether it can return to pre-Musk revenue heights or continue facing periodic contractions.