Snap’s revenue saw a 5% increase for the final quarter of last year, reaching $1.36 billion.
Despite this growth, the figure fell slightly below Wall Street analysts’ forecasts, who had anticipated $1.38 billion for Snapchat’s parent company.
However, Q4 saw net losses narrowed to $248 million, showing improvement from the $288 million reported in the same period the previous year.
Lay offs. The disappointing results come after Snap laid off approximately 10% of its global workforce earlier this week. Evan Spiegel, Snap CEO, said the decision was “painful” but “necessary to achieve our long-term goals.”
Ad strategy change. Snap changed its advertising strategy last year to focus more on direct response ads, which let users click and buy products directly from the app. This shift initially led to lower sales in the first half of the year, according to Spiegel, but will benefit Snap’s advertising business in the long run.
Takeaways. Snap has shared additional insights into its 2023 performance:
Looking ahead. Snapchat predicts its daily active users to reach 420 million in the first quarter of this year, with revenue expected to increase between 11% and 15%.
What Snap is saying. Evan Spiegel, Snap CEO, said in a statement:
Why we care. Following a performance below Wall Street expectations, Snapchat may present a unique opportunity for advertisers this quarter. The potential dip in advertiser interest could result in reduced competition, making ad placements more cost-effective. This, in turn, offers advertisers the chance for a higher return on ad spend. However, it could also be a riskier investment for advertisers in comparison to rival platforms like Meta.
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