Meta’s Threads struggles to grow amid rivalry with Elon Musk’s X, ranking ahead of only Tumblr
Thilina Kaluthotage | Nurphoto | Getty Images
Meta’s Threads real-time messaging app is struggling to attract new users like it did during its blockbuster July debut.
The Twitter clone now ranks near the bottom of the most popular social media platforms, ahead of only Tumblr, as measured by the number of U.S. users, according to Insider Intelligence’s first Threads forecast, published Tuesday.
Insider Intelligence said it expects Threads to have 23.7 million U.S. users in 2023, far behind Facebook, Instagram and TikTok, which have 177.9 million, 135.2 million and 102.3 million users, respectively. Its closest rival, X, will have 56.1 million U.S. users in 2023, the forecast said, which means that Threads will have less than half of the U.S. user base of the messaging app formerly known as Twitter.
For the U.S. market, the analyst firm said Threads will continue to “rank second-to-last among social networks” through 2025.
Meta did not respond to a request for comment.
The new forecast joins a growing list of third-party estimates from mobile analytics firms such as Sensor Tower and Similarweb that have recently documented declining usage of Threads.
When Threads debuted, it rapidly gained millions of users due in part to its easy sign-up process for existing Instagram users. The messaging app also benefited by being a mainstream alternative to X, which several analyst firms including Insider Intelligence have said is losing users amid the ownership of Tesla chief Elon Musk.
“Threads received an initial boost from Twitter’s missteps, but it can’t rely on X defectors to continue to grow,” Insider Intelligence principal analyst Jasmine Enberg said in a statement.
If Musk decides to charge all X users a monthly subscription fee, as he said during a recently livestreamed talk with Israeli Prime Minister Benjamin Netanyahu, Meta could have a “clearer avenue to monetize Threads,” Enberg said.
“Assuming Musk doesn’t backtrack, the move will likely alienate more X users and potentially increase advertiser interest in Threads,” Enberg added.
Still, Meta CEO Mark Zuckerberg has previously said that the company has no plans to monetize Threads until it’s bigger and more established.
The social networking giant has been releasing several new features for Threads intended to make it more compelling, such as a desktop version and a search tool. Indeed, both advertisers and creators have previously told CNBC that Threads needs certain features such as analytics tools to become a more robust platform that they will invest time and money into.
Enberg said Threads needs to establish an identity that’s “more than an extension of Instagram or an alternative to X” in order to become a major player in the social media market.
“TikTok was able to break through largely because it offered users a unique new social experience,” Enberg said, referring to the ByteDance-owned short-video app’s rise to prominence.
Watch: Are the Threads unraveling?
Rene Haas, CEO of chip tech provider Arm Holdings, holds a replica of a chip with his company’s logo on it, during an event in which Malaysia’s Prime Minister Anwar Ibrahim officially announces a $250 million deal with the company, in Kuala Lumpur, Malaysia March 5, 2025.
Hasnoor Hussain | Reuters
Arm shares dropped more than 8% in extended trading on Wednesday after the chip-design company issued weaker-than-expected guidance for the current quarter.
Here’s how the company did in the fiscal fourth quarter compared with LSEG consensus:
- Earnings per share: 55 cents, adjusted vs. 52 cents expected
- Revenue: $1.24 billion vs. $1.23 billion
While Arm topped estimates for the quarter ended March 31, Wall Street is looking ahead to the company’s forecast for the first quarter.
Arm said revenue will be between $1 billion and $1.1 billion. The middle of the range is below the $1.1 billion average analysts estimated, according to LSEG. Earnings per share will be between 30 cents and 38 cents, while analysts were expecting 42 cents.
SoftBank controls about 90% of Arm, and took the company public in 2023. It now has a market cap of over $130 billion as of Wednesday’s close.
Arm designs the fundamental architecture upon which many chips are built, and sells licenses for its designs to companies such as Qualcomm and Nvidia, charging royalty fees on each sale they make. The company claims 99% of premium smartphones are powered by Arm technology.
Royalty revenue in the quarter rose 18% from a year earlier to $607 million.
Net income fell 6% to $210 million, or 20 cents a share, from $224 million, or 21 cents, in the year-ago quarter. Revenue jumped 34% from $928 million a year earlier.
Thomas Fuller | SOPA Images | Lightrocket | Getty Images
AppLovin shares soared as high as 15% in extended trading after the company reported earnings and revenue that beat expectations and announced the sale of its mobile gaming business.
Here’s how the company did compared to LSEG consensus estimates:
- Earnings: $1.67 per share vs $1.45 per share expected
- Revenue: $1.48 billion vs $1.38 billion expected
AppLovin also agreed on Wednesday to sell its mobile gaming business to Tripledot Studios in a deal worth $400 million in cash considerations. The advertising tech company will also obtain a roughly 20% ownership stake in Tripledot Studios, which makes mobile games like Sudoko Friends, Puzzletime and Solitaire Classic.”
The deal is expected to close in the second quarter of 2025.
AppLovin said second-quarter sales should come in the range of $1.2 billion to $1.22 billion, trailing analysts expectations of $1.38 billion.
The company reported first-quarter net income of $576 million, or $1.67 per share, up from $234 million, or 67 cents per share, in the same quarter of 2024.
AppLovin total costs and expenses for the first quarter came in at $820.55 million, representing a 14% increase from the previous year during the same quarter.
The ad-tech firm said in February that it had signed a term sheet to sell its apps business for “total estimated consideration” of $900 million, which included $500 million in cash.
AppLovin’s business has been split between advertising and apps, which is primarily made up of game studios that the company has acquired over the years. With the historic growth in its advertising unit, due to rapid advancements in artificial intelligence, the apps business had become much less important.
The company logged $1.16 billion in first-quarter advertising sales, up from the $678 million it recorded a year ago during the same period.
Sales of the company’s apps-related business for the quarter came in at $325 million, which was a 14% decline from the prior year.
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