Snap's Revenues Hit $390M, User Engagement Stabilizing

Following in Facebook’s footsteps, Snap just reported better-than-expected fourth-quarter earnings.

For the quarter ended December 31, the “camera company” said revenue rose to $390 million, which represented a 36% increase year-over-year. That helped Snap reduce its operating loss from $195 million to $166 -- and its net loss from $192 million to $158 million -- year-over-year.

“We are substantially closer to achieving profitability, as we have maintained a relatively flat cost structure across the past five quarters,” Snap CEO Evan Spiegel said in an earnings statement.

Yet Spiegel seemed most excited about Snap’s engagement numbers and the prospect of finally fixing the problems with its Android app.

“We ended the year with user engagement stabilizing and have started rolling out the new version of our Android application to a small percentage of our community,” Speigel said.

Daily active users of 186 million during the fourth quarter of 2018 approached the 187 million DAUs that Snap reported during the same period in 2017.

Among iOS users, DAUs increased quarter-over-quarter and year-over-year, while average time spent on iOS grew more rapidly during the fourth quarter of 2018 than 2017.

Stateside, Snap said it reached over 70% of the all 13- to-34-year-olds with its premium mobile video ads on a per month basis.

Collection ads -- which let businesses show off four products in one Snap -- drove more than twice the return on ad spend, year-over-year. This past quarter, Snap also launched Product Catalogs, which let ecommerce businesses use their own websites to create Snap ads.

The Snap Pixel continued to see growth with over 600 million purchase events in the fourth quarter of 2018 -- up from 230 million in the third quarter of 2017.

Big holidays remain key to Snap’s engagement strategy. For example, users played with (or viewed) Lenses 700 million times on New Year’s Eve, 2018 -- which was up nearly 40% year-over-year.

Compared to last year, Snap also said 30% more users are watching Publisher Stories and Shows on a daily basis.

The company’s original content strategy appears to be performing well. For instance, “Dead Girls Detective Agency” -- a Snap Original Show produced by its joint venture with NBCUniversal -- reached more than 14 million unique viewers, during the fourth quarter.

Plus, Bitmoji Stories -- a cartoon starring Snapchatters and their friends -- reached more than 40 million viewers in December.

This past quarter, the company continued to expand its international footprint in France, Germany, Ireland, Norway, the UK, India, and the Middle East.

Looking ahead to the first quarter of 2019, Snap said it expects revenue in the range of $285 million to $310 million, which would represent growth of between 24% and 34% year-over-year.
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