Trump Media Posts $400M Loss, Declining Revenue as Truth Social Faces Uncertain Future

Trump Media & Technology Group (TMTG), the company behind Truth Social, posted a staggering net loss of $400.9 million for 2024, marking a significant downturn from its $58.2 million loss in 2023.

The company’s revenue also took a hit, falling 12% year over year to $3.6 million, raising fresh concerns about its financial viability despite its high-profile association with former U.S. President Donald Trump.

Shares of Trump Media fell about 1% in extended trading on Friday following the release of the company’s annual report, reflecting investor unease over the company’s growing losses and uncertain business model. The stock had nearly doubled in value last year, largely fueled by Trump’s successful re-election bid in November. However, year-to-date, the stock has dropped about 11%, bringing its market capitalization to approximately $6.59 billion.

Despite its status as a pub1licly traded company following its merger with Digital World Acquisition Corp. (DWAC) in March 2024, Trump Media has struggled to generate meaningful re1venue. The $3.6 million reported for the full year pales in comparison to industry peers, and its growing net loss suggests deeper operational challenges.

Trump Media attributed some of its financial struggles to legal fees incurred during its controversial merger process. In a statement, the company blamed “obstruction” from President Joe Biden’s Securities and Exchange Commission (SEC), which had delayed the merger for over two years. Additionally, a change to a revenue-sharing agreement with an advertising partner contributed to lower sales.

The company also acknowledged the limitations of its advertising model, admitting that revenue had fluctuated due to its experimental approach.

“Revenue has varied as we selectively test a nascent advertising initiative on our Truth Social platform,” the company stated in its filing.

Unlike mainstream social media platforms such as Meta and X (formerly Twitter), Trump Media does not track standard user engagement metrics like active user counts or average revenue per user. The company dismissed such measures in its filing, arguing that they could “potentially divert its focus from strategic evaluation with respect to the progress and growth of its business.” However, without these key indicators, investors and analysts are left in the dark regarding Truth Social’s actual performance and user engagement.

One of the few bright spots for Trump Media is its substantial cash reserves. The company reported holding $776.8 million in cash, cash equivalents, and short-term investments, with only $9.6 million in debt. This war chest provides it with some financial breathing room, though it remains to be seen how the company plans to deploy these funds to offset its mounting losses.

TMTG Chairman and CEO Devin Nunes, a former Republican congressman, suggested that the company may shift toward a broader corporate structure.

“We will continue to explore opportunities to partner, merge with, and acquire other entities that are able to function effectively if TMTG evolves into a holding company with subsidiaries spanning several industries,” Nunes said in a statement.

This could underline a potential diversification strategy, especially given that Truth Social itself has failed to establish a competitive foothold against dominant social media giants.

Trump remains Truth Social’s most prominent user, boasting 8.9 million followers on the platform. However, this number pales in comparison to his 100.9 million followers on X, where he has been active since Musk’s acquisition of the platform. The discrepancy raises questions about whether Truth Social can maintain relevance, especially if Trump shifts more of his engagement to X, where his reach is far greater.

Adding to the intrigue, Musk has been working with the Trump administration on a new government initiative focused on “efficiency.” While details remain unclear, some analysts speculate that Musk’s influence over Trump could impact the future trajectory of Truth Social—potentially even leading to partnerships with X or other Musk-backed ventures.

Truth Social’s Expansion Efforts

Despite its financial struggles, Trump Media has continued its push for expansion. In the fourth quarter of 2024, the company launched Truth+, a video streaming service available on Android, iOS, and the web. The move is seen as an attempt to diversify its offerings and tap into the growing demand for alternative media platforms. However, the financial success of Truth+ remains uncertain, especially given the heavy competition from established streaming giants.

Additionally, Trump Media’s lack of an earnings call since its Nasdaq debut has raised concerns among investors. Publicly traded companies typically hold quarterly earnings calls to provide transparency and answer questions from shareholders. The absence of such engagement has fueled speculation1 about internal instability and reluctance to disclose deeper financial troubles.

Can Trump Media Survive?

For now, Trump Media’s ability to sustain itself hinges on a few key factors:

1. Trump’s Continued Political Influence – The company’s stock has largely moved in tandem with Trump’s political fortunes. With his re-election bid successful, his influence remains strong, but if he faces legal or political setbacks, Trum1p Media could suffer.
2. User Growth and Monetization – Without reliable metrics, it’s unclear whether Truth Social is actually expanding its user base or improving ad revenue.
3. Strategic Partnerships or Acquisitions – If Trump Media follows through on its plan to evolve into a holding company, it may seek acquisitions that provide more stable revenue streams.
4. Regulatory and Legal Challenges – The company has already cited regulatory obstacles from the SEC, and any additional scrutiny could pose further risks.

While Trump Media currently holds enough cash to sustain its operations in the near term, its long-term viability remains in doubt. If it continues to burn through capital without a sustainable business model, it risks becoming yet another failed social media experiment, despite its high-profile backing.