How Truth Social Makes Money

Truth Social, an alternative social media platform started by former President Donald Trump, makes money from advertising. According to Trump Media & Technology Group (TMTG), which owns Truth Social, the company was “founded to fight back against the big tech companies—Meta (Facebook, Instagram, and Threads), X (formerly Twitter), Netflix, Alphabet (Google), Amazon, and others” and to “promote free expression.”

After its initial public offering (IPO) in March 2024, Truth Social was valued at nearly $8 billion at market close on the first day of public trading, but the stock value declined by over 50% in the weeks following the news. Some view the move to take Truth Social public as a strategy by Trump to bolster his personal finances.

Truth Social’s Business Model

Like social media platforms Facebook, Instagram, and X, Truth Social seeks to generate revenue by displaying digital advertisements on its users’ feeds. As part of its growth strategy, it seeks to grow its user base in order to “drive more unique content, which in turn will drive the viral, organic promotion of content on Truth Social, thereby attracting more platform partners and advertisers.”

However, Truth Social does not currently track “traditional key performance indicators, such as signups, average revenue per user, ad impressions and pricing, or active user accounts including monthly and daily active users.”

Truth Social markets itself as a place for free speech that does not discriminate “on the basis of political ideology,” calling itself “America’s ‘Big Tent’ social media platform.” As such, it seeks to attract users and advertisers who may be disenchanted with other mainstream social media platforms and who seek an alternative online forum. 

TMTG also notes that its success is in part dependent on “the reputation and popularity of President Trump” and that the “value of TMTG’s brand may diminish if the popularity of President Trump were to suffer.”

In March 2024, TMTG, the company that owns Truth Social, had its IPO and was valued at around $8 billion on its first day at market close. However, the value of the stock declined by over 50% in the weeks since it initially started trading. Prior to the IPO, TMTG’s operations were funded primarily through “loans or offerings of securities exempt from the registration requirements of the Securities Act.”

Truth Social’s Financials

Truth Social initially launched for iOS in April 2022, was released as a web app in May 2022, and became available for Android in October 2022. It became available internationally in June 2023.

In 2023, all of Truth Social’s revenue was derived from advertising. Since the platform launched in 2022, its revenues increased significantly, largely due to the testing of a new advertising initiative. However, the company was not profitable in 2023 and reported a net loss of approximately $58.2 million, down around 215% compared to the net income reported in 2022, of $50.52 million.

Truth Social’s 2023 statement of operations shows that it incurred considerable interest expenses, approximately $39.43 million, relating to convertible promissory notes. Currently, no quarterly financial statements are available; financial reporting is limited to annual income statements included in the required U.S. Securities and Exchange Commission (SEC) reporting.

Under the “Risk Factors” section of its 2024 10-K report, TMTG states that it “expects to incur operating losses for the foreseeable future,” citing its efforts to “improve its business model by developing its technology as an early stage company.”

The report also mentions that “there is limited operating history upon which to base any assumption as to the likelihood that TMTG will prove successful, and TMTG may never generate sufficient operating revenues to achieve profitable operations. If TMTG is unsuccessful in addressing these risks, its business will most likely fail.”

Recent Developments

As Trump continues to battle legal issues, facing the threat of millions of dollars in fees and penalties, some view Truth Social’s IPO as a strategy for Trump to increase his net worth.

Indeed, the 2024 10-K report filed with the SEC lists the following under “Risk Factors” associated with investing in their stock: “President Trump holds approximately 57.6% of the outstanding TMTG Common Stock, which limits other stockholders’ ability to influence the outcome of matters submitted to stockholders for approval.” However, a lockup provision prevents him from selling these shares for six months.

Meanwhile, the company has had a history of legal issues. Trump sued the co-founders of Truth Social right before the IPO in March, alleging that they mismanaged the setup and public offering of the company. The lawsuit was in response to one that the co-founders filed against Trump in February, claiming that he and other company leaders were trying to deprive them of a stake in the company potentially worth hundreds of millions of dollars.

TMTG recently announced that it has finished research and development on a content delivery network, a live TV streaming platform that will be incorporated into Truth Social.

The Bottom Line

Like other social media platforms, Truth Social aims to make money from advertising revenue. However, the company was not profitable in 2023, as it incurred considerable expenses from interest.

One of the company’s growth strategies, in addition to attracting new users to grow the platform, is to increase its product offerings and services, including technology that “supports video streaming and provides a ‘home’ for cancelled content creators.” It will also “actively seek out opportunities” to acquire and partner with entrepreneurs who cater to “conservatives across various industries.”