In the final quarter of last year, Snap’s income had a 5% rise, totaling $1.36 billion. The revenue growth was lower than the prediction of $1.38 billion by Wall Street analysts. Nevertheless, the net losses narrowed to $248 million from the earlier year’s $288 million. This development followed Snap’s decision to let go of 10% of its workforce, which was described by Snap CEO Evan Spiegel as “painful” but “necessary to achieve our long-term goals.”
In the past year, Snap modified its advertising strategies to prioritize direct response ads, which allow users to purchase products directly from the app. Despite initially leading to lower sales, this shift will ultimately benefit Snap’s advertising business. Snap has also revealed some insights into its performance in 2023. Daily Active Users increased by 10% year-over-year to 414 million, with a 5% increase in fourth-quarter revenue to $1,361 million, along with a fourth-quarter operating cash flow of $165 million and Free Cash Flow of $111 million.
For the first quarter of 2024, Snapchat expects its daily active users to reach 420 million with an anticipated revenue increase of 11% to 15%. Evan Spiegel expressed optimism, stating, “2023 was a pivotal year for Snap, as we transformed our advertising business and continued to expand our global community, reaching 414 million daily active users.”
After falling short of Wall Street’s expectations, Snapchat may become an attractive prospect for advertisers this quarter. The potential drop in ad interest could result in reduced competition, making ad placements more cost-effective, offering advertisers the chance for a higher return on ad spend. However, it could also be a riskier investment for advertisers compared to rival platforms like Meta.
For detailed insights, you can read Snapchat’s report in full for more information.
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