World-famous companies that make hardly any profit
Huge companies with tiny profits



Since going public, the microblogging platform has hemorrhaged users, money, and investors’ patience. It didn't turn its first annual profit until 2018, five years after its IPO, and its share price dropped to an all-time low of $14.62 (£11.96) in 2016. Things have since improved; in February last year the price rose to a new all-time high of over $77 (£63), driven in part by rocketing revenues. But the stepping down of founder Jack Dorsey in November 2021, as well as Elon Musk's unsuccessful takeover bid earlier this year, have repeatedly shaken investor confidence. The company's share price is currently $44.43 (£36.27).

Twitter is still a big player on the social media scene with around 396.5 million active users, although it now prefers to report the number of monetisable users on its platform. This refers to users that can see ads, of which there are currently 187 million, according to Backlinko.com. The fact that Twitter can only make money from around half its active users could explain why its profits remain so low, at just $0.636 billion (£0.528bn) last quarter, since the business principally makes money from advertising and data licensing.
Snapchat

Snap Inc, the makers of instant messaging app Snapchat, went public in February 2017 and was valued at $25 billion (£20bn) by investors in March that year. It was hailed as a triumph for the social media darling of millennials. The image-sharing network became popular for its cutesy filters and, because it deletes your pictures after 24 hours, Snapchat is touted as a game changer, breathing new life into the stale social media industry. But was Snapchat the goose with the golden eggs it was cracked up to be?
Snap Inc IPO at the New York Stock Exchange

Snapchat

Like Twitter, Snap Inc's main source of revenue comes from advertising on its platform. Companies can sponsor photo filters or publish short videos that play between posts
Uber

Uber

In the run-up to its IPO, Uber was valued at everything from $75.46 billion (£61.7bn) to a whopping $120 billion (£98.2bn). At this latter price, Uber would reportedly have been worth more than Ford, Fiat Chrysler, and General Motors combined! A surprising figure for a company that at the time was losing around $800 million (£655m) every quarter...
Uber

In a nutshell, Uber rides are cheap because the company subsidises the cost of each trip. Some analysts worried that after its IPO, at which it was finally valued at $75.46 billion (£62.2bn), Uber would be forced to raise prices to reach profitability. This hasn't been the case – and while this might be good news to customers, it's less good for investors. The company still hasn't reached full profitability and recorded losses of $496 million (£408.6bn) last year.
Spotify

Spotify

Spotify

Spotify has never published an annual profit, according to Business of Apps. The streaming platform posted a loss of over $40 million (£33m) last year against revenues of $9.9 billion (£8.2bn). Although this represents a huge reduction in losses from 2015, when the company reported net losses of $194 million (£150m), it still means Spotify has a long way to go before its backers can expect dividends...
Tumblr

Tumblr

It seems as though Mayer and Yahoo grossly overestimated Tumblr’s value. At the time of the acquisition, Quartz estimated Tumblr’s total assets to have been just $353 million (£271m) plus around $114 million (£90m) in liabilities – way under the $1 billion (£824m) Mayer paid for it. But is Tumblr enjoying a renaissance?
Tumblr

According to a report in The New Yorker, the platform is proving an unexpected hit with Generation Z, who now make up 48% of active users and 61% of new users. Between July last year and February this year the social media's revenues were reportedly up by an impressive 55%, so while profitability isn't around the corner, it might not be as far away as investors once feared.
Yelp

Yelp is one of America’s leading ratings and reviews platforms with over 45.9 million unique desktop users and 36.7 million unique mobile users a month. However, Yelp is struggling to convert these visitors into profit. According to Macrotrends, Yelp's profit margin was just 4.32% as of 30 June this year.
Yelp

Yelp has been valued at $2.61 billion (£2.2bn). The company struggled to even scrape by a profit in the first few quarters after its IPO in 2012. After it started making some money it consistently underperformed or came in at the low end of estimates.
Yelp

According to Marketbeat.com, Yelp's projected earnings per share could grow by 41.79% over the next year, taking them from $0.67 (£0.55) to $0.95 (£0.78). But the consensus is that with so many actively-engaged users, it could be doing much better.
Tesla

Tesla is one of the most talked-about companies in the world, partly due to the controversy of its CEO Elon Musk. Yet the business – which has been credited with fuelling the electric car revolution in the US – has historically struggled to stay in the black. So when it made its first modest profit of $22 million (£17m) at the end of 2016, the world took notice.
Tesla CEO Elon Musk at the Crossover launch

Indeed, in the third quarter of 2015, Tesla lost a remarkable $230 million (£177m), meaning the small profit reported in Q3 2016 was quite the feat. The company has largely managed to stay profitable since then, but you might be surprised to learn that the lion's share of its profits doesn't actually come from car sales. In fact, if it weren't for a lucrative sideline, Tesla wouldn't be profitable at all...
Tesla electric car chargers

According to an article published by CNN last year, Tesla has made $3.3 billion (£2.7bn) over the last few years by selling regulatory credits to other car companies. Eleven states require automakers to sell a certain number of electric cars by 2050 – and those that can't meet the targets must make up the shortfall by purchasing regulatory credits from companies that can. Enter EV king Tesla. In 2021 alone, Tesla made $1.6 billion (£1.3bn) from this side hustle against a net income of just $721 million (£595m). In other words, without its sideline in selling credits, the company would be posting a substantial net loss.
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