• by Colin Kirkland , October 24, 2023

After laying off 6,000 employees and shutting down its augmented reality (AR) enterprise business, Snap beat expectations on earnings and revenue in its Q3 earnings report.

The company's revenue increased 5% year-over-year, with shares up 3% in after-hours trading on Tuesday.

Overall, revenue was $1.19 billion compared to $1.13 million last year and the total of $1.11 billion expected. The company’s global daily active users increased by about 300K from last year, to 406 million -- earning $2.93 on average per user compared to the expected $2.74.

The company said its sales were impacted by a pause in spending from a large portion of brand-oriented advertising campaigns following the onset of the war in the Middle East, and isn’t providing official fourth quarter guidance “due to the unpredictable nature of war.”

In a statement, Snap CEO Evan Spiegel said the company plans to improve its advertising platform to “drive higher return on investment” for its ad partners, while evolving its go-to-market efforts “to better serve partners and drive customer success.”

“We are evolving our advertising formats, optimization, measurement, and delivery to drive more clickthrough conversions that are easy for our partners to observe and measure using their preferred measurement solutions,” the letter to investors read. “In addition, we are working to ensure that off-platform and out-of-session conversions are better captured by first- and third-party measurement solutions.”

The company said that for Q4 it will also be expanding its ad tests within its Spotlight content feature, which saw a 200% increase in user watch time compared to last year.

As for reach, Snapchat reported that 75% of 13- to-34-year-olds in over 25 countries use the platform, with these countries representing over 50% of global ad spend.

In addition, 43% of daily Snapchatters in the US aged 16 and up are not on TikTok every day and 53% don’t use YouTube daily, nodding to an exclusivity factors among its users.

Snap also reported impressive growth for its premium subscription service, Snapchat+, with five million subscribers joining just over a year after launch. Because of this, related revenue grew over 300% from last year, delivering over $200 million.

Lastly, the company said that its chief operating officer, Jerry Hunter, is retiring after seven years at Snap.