(San Francisco) Snapchat now has 363 million daily active users, up 16 million in three months, but they’re generating increasingly low revenue for the struggling social network.
Posted at 6:17 p.m.
Its quarterly results released Thursday sent its stock plummeting 25% in electronic trading after the New York Stock Exchange closed.
The platform disappointed with revenue of $1.1 billion, up but slightly below market expectations, and net losses of $360 million, quadrupling year-on-year, partly due to the departure plan decided two months ago.
Revenue per user, a key indicator for social networks, came out at 3.11 dollars, its lowest level since the beginning of 2021.
Evan Spiegel, the boss of the American group, insisted on the gains in terms of members, and spoke of an “unstable macroeconomic environment”.
Inflation and rising interest rates are constraining spending by advertisers, who are taking refuge on well-established platforms such as Google, YouTube, Facebook and Instagram, or adopting that of the very popular social network TikTok.
“Snap has been selling ad space for eight years, but a lot of brands still don’t understand the network and put it in their experimental budgets,” notes Jasmine Enberg of Insider Intelligence.
“It doesn’t help that Snap has aligned its future with augmented reality, which has promising long-term potential, but which remains a niche advertising format, easy to cut when budgets are tight,” he said. she adds.
The app claims it had gained users in all regions of the world, including North America and Europe, where some competitors are facing the beginning of saturation.
She also points out that they spend more time on certain formats, such as “Spotlight”, a public feed of user-generated content, modeled on TikTok.
“This quarter we have taken steps […] following our three strategic priorities: growing our community and their engagement with our products, reaccelerating and diversifying our revenue growth, and investing in augmented reality,” said Evan Spiegel, quoted in the release.
The group, which has never generated annual net profit, had to make a warning on the results in May, and said it was “not satisfied” in July with its second quarter results.
In August, Evan Spiegel announced a restructuring of the group, leading to the elimination of approximately 20% of the workforce, or more than 1,200 employees.