• Snap reported first-quarter results that beat analysts’ estimates for earnings and revenue, with revenue increasing 21% year-over-year to $1.19 billion.
• Snap’s revenue growth was primarily driven by improvements in its advertising platform and demand for its direct-response advertising solutions.
• Snap expects to report revenue between $1.23 billion and $1.26 billion in the second quarter, up from the $1.22 billion expected by analysts.
Snap Inc. (SNAP) reported its first quarter 2024 earnings on April 25th, beating Wall Street’s expectations and showing a return to double-digit revenue growth. The social media company’s shares soared over 27% in extended trading following the news.
Financial Results
Snap delivered the following financial results for Q1 2024:
- Earnings per share: $0.03 adjusted vs. a loss of $0.05 expected
- Revenue: $1.19 billion vs $1.12 billion expected
- Global daily active users: 422 million vs 420 million expected
- Average revenue per user: $2.83 vs $2.67 expected
Revenue increased 21% year-over-year to $1.19 billion. This accelerates Snap’s growth after six straight quarters of single-digit gains or declines. The company attributed the revenue growth primarily to improvements in its advertising platform and demand for its direct-response ads.
Advertising revenue hit $1.11 billion, while Snapchat subscriptions revenue reached $87 million, up 194% year-over-year. Snap now has over 9 million paying Snapchat+ subscribers.
Adjusted EBITDA was $46 million, far exceeding the expected $68 million loss. Snap said this was driven by operating expense discipline and accelerating revenue growth.
User Engagement
Snap reported 422 million daily active users (DAUs) in Q1, a 10% increase year-over-year. It expects 431 million DAUs next quarter.
The company said time spent watching content grew, driven primarily by Spotlight and Creator Stories engagement. Time spent watching Spotlight content was up 125% year-over-year.
Outlook
For Q2 2024, Snap expects:
- Revenue between $1.23 billion and $1.26 billion, above the $1.22 billion expected
- Adjusted EBITDA between $15 million and $45 million, compared to expectations of a $155 million loss
Snap says infrastructure costs per DAU will fall between $0.83 and $0.85 cents for the rest of 2024. The company added it will continue to assess infrastructure investment levels based on long-term interests.
Earlier in 2022, Snap laid off 20% of its workforce. But it says headcount and personnel costs will still grow modestly through the rest of this year.
Overall, Snap believes it is well-positioned to continue improving business performance thanks to its ad platform, leadership team, and strategic priorities. The company appears to be regaining its momentum after a challenging 2022.
