Threads vs. X: The Ad Revenue Battle for Social Media Supremacy

The social media landscape in 2025 is defined by a high-stakes rivalry between Meta's Threads and Elon Musk's X (formerly Twitter). While both platforms are vying for dominance in user engagement and ad revenue, their divergent strategies and growth trajectories paint a complex picture for investors. This analysis evaluates the monetization potential and long-term viability of Threads and X, drawing on recent data to assess which platform is better positioned to capture the next era of digital advertising.

User Growth Dynamics: Threads' Mobile Surge vs. X's Web Resilience

Meta's Threads has emerged as a formidable challenger to X, particularly in mobile user growth. According to a Forbes report, Threads surpassed X in global daily active mobile users in October 2025, with 128.2 million versus X's 124.7 million. By October 30, the gap had widened to nearly 9 million users, with Threads hitting 137 million daily mobile users compared to X's 128.1 million. This momentum is driven by Threads' seamless integration with Instagram, which has fueled a 48% year-over-year growth in daily mobile users, while X's mobile user base declined by 16%.

However, X retains a critical edge on the web, where it commands 141.7 million daily users compared to Threads' 7.6 million. In the U.S., X also maintains a lead in mobile DAU (21.4 million vs. Threads' 16.6 million), though Threads' U.S. user base grew by 49.4% year-over-year, outpacing X's 21.6% decline. These metrics highlight a key asymmetry: Threads is winning the mobile battle but lags in web adoption and professional demographics, where X still holds sway.

Monetization Strategies: Threads' Ad-Free Model vs. X's Declining Revenue

Threads' monetization strategy remains in its infancy. As of late 2025, the platform is ad-free, relying on organic content to drive engagement. However, analyst projections suggest Threads could generate $11.3 billion in revenue by 2026, up from $8 billion in 2025, as Meta integrates it into its broader ad infrastructure. This optimism is fueled by Threads' 320 million active users as of early 2025 and its 73.6% higher engagement rate compared to X, driven by an algorithm prioritizing likes, replies, and shares.

In contrast, X's ad revenue has faced headwinds. Despite a 17% year-over-year increase in Q3 2025, with $752 million in revenue, the platform's U.S. ad revenue has declined by 59% since 2022. Total revenue for the first nine months of 2025 reached $2.1 billion, but this growth is overshadowed by Musk's costly restructuring efforts, including layoffs and content moderation overhauls. X's reliance on promoted tweets, trends, and accounts remains strong, but its declining user base and advertiser skepticism pose long-term risks.

Engagement and Audience Insights: Niche Appeal vs. Broad Utility

Threads' algorithm-driven focus on community interaction has attracted a younger, lifestyle-oriented audience, making it ideal for creative brands and viral content. Its 320 million active users are more likely to engage in replies and shares, creating a feedback loop that enhances ad targeting potential. Conversely, X's strength lies in real-time updates and professional discourse, making it indispensable for breaking news, B2B marketing, and global events. This duality suggests that neither platform can fully replace the other, but Threads' engagement metrics give it a distinct advantage in monetizing younger demographics.

Investment Implications: Meta's Ecosystem vs. X's Brand Resilience

For investors, the key question is whether Threads' rapid growth can translate into sustainable ad revenue. Meta's ecosystem advantage-leveraging Instagram's user base and Facebook's ad infrastructure-positions Threads to scale quickly once ads are introduced. Analysts estimate Threads could generate up to $8 billion in 2025 and $11.3 billion in 2026, a trajectory that mirrors Meta's historical ability to monetize new platforms.

X, meanwhile, faces an existential challenge: balancing Musk's vision of a "free speech" platform with the financial realities of declining user growth and ad revenue. While Q3 2025 revenue showed a 17% year-over-year increase, this growth is partly attributable to cost-cutting rather than organic demand. X's brand remains a global utility, but its long-term viability hinges on regaining advertiser trust and stabilizing its user base.

Conclusion: A Tug-of-War with No Clear Winner

The ad revenue battle between Threads and X reflects a broader shift in social media: the rise of algorithm-driven, community-centric platforms versus the enduring utility of real-time communication tools. Threads' mobile dominance and engagement metrics suggest it is well-positioned to capture a significant share of the ad market, particularly among younger audiences. However, X's entrenched position in professional and global news ecosystems ensures it will remain a key player.

For investors, the optimal strategy may lie in hedging bets: capitalizing on Threads' growth potential while monitoring X's ability to adapt to Musk's vision. Both platforms are reshaping the social media landscape, but only time will tell which one secures lasting supremacy.