(San Francisco) Snap, the parent company of Snapchat, saw its turnover take off in the first quarter, to nearly $1.2 billion, an unexpected rebound for the social network popular with teenagers, but which is struggling to attract advertisers.
Its revenues thus increased by 21% over one year, according to its results press release published Thursday, a level of growth well above market expectations and even those of the Californian company.
The group did not make a profit, but it still reduced its losses to 305 million dollars, instead of 329 million at the same period last year.
“The value we bring to our community and our advertising partners has translated into improved financial performance,” said boss Evan Spiegel, quoted in the press release.
He assures that Snap “increasingly matters” to advertisers of all sizes, thanks to its “large, growing audience which represents a difficult to reach market”, “its safe environment for brands” and its “ complete advertising solutions”.
“I have been optimistic about Snap for a long time, despite its difficulties in generating revenue,” responded Jasmine Enberg of Emarketer.
“It’s taken a while, but the hard work the company has put into its advertising business is clearly starting to pay off. The rest of the year could be strong,” added the analyst.
On Wall Street, Snap’s stock took off nearly 25% during electronic trading after the stock market closed.
Last spring, Evan Spiegel, who co-founded Snap in 2011, was pleased to have reached 750 million monthly users, “including the vast majority of 13-34 year olds in more than 20 countries”.
At the start of the year, the application has 422 million daily users, 8 million more than at the end of 2023.
Unlike Meta (Facebook, Instagram), Snap has never managed to earn enough advertising revenue to generate an annual profit.
In 2022, its net losses tripled to $1.43 billion. In 2023, the group reduced them slightly, to 1.32 billion.
After building its success on ephemeral messages, photos, and videos, which were copied by its rivals, and on augmented reality filters, the group began to diversify.
It notably launched Spotlight (short and entertaining videos like on TikTok) and a paid subscription plan, Snapchat+, with exclusive tools, including a generative AI assistant.
Time spent watching content on Spotlight increased 125% in one year, according to the press release, and Snapchat+ exceeded 9 million subscribers (triple from last year).