• by Colin Kirkland , February 5, 2025

In its latest performance report, Snapchat shows that it built on strong results from Q3, steadily increasing its user base -- including paying subscribers -- while beating revenue expectations, launching new creator tools and doubling the number of advertisers on its platform over the quarter.

The 15-year-old company grew its global user base by 10 million daily active users in Q4, reaching 453 million total DAUs -- an increase of 39 million year-over-year, or 9%.

However, investors may note that in the past year, Snap actually lost users in the U.S. -- where it makes the majority of its money -- while maintaining the same base in Europe and adding users in its “Rest of the world” category, especially in India. 

Still, despite its user growth in these key regions, the company’s revenue intake this quarter was strong, showing a 14% year-over-year increase -- bringing in $1.56 billion in total.

For the year, Snap generated $5.36 billion, a 16% year-over-year increase. 

Snap likens its revenue growth to the expansion of its advertising business, which it started rebuilding in 2022, as well as its Snapchat+ subscription program.

“Direct Response ad revenue growth was up 14% year-over-year in Q4 and was the largest driver of our ad revenue growth in 2024,” the company explains in its report. “Strong demand for Pixel Purchase and App Purchase Optimizations led to revenue from app-based purchase optimizations growing more than 70% YoY in Q4.”

By improving its Lead Generation product, including “ad ranking model improvements, new creative customization, and integrations with preferred CRM partners,” Snap says it saw a 6x increase year-over-year in the number of leads generated for advertisers, while also decreasing cost-per-lead by over 40% on average. 

In Q4, Snap began testing two new ad placements -- Sponsored Snaps and Promoted Places -- and the company says that results have been “promising,” with Sponsored Snaps delivering over 50 million impressions on average in the U.S. to Snapchatters 18 or older. The company says makes the placement its “largest single day reach product.”

According to the company, both new products, which Snap plans to roll out to additional markets in the next quarter, grew the number of unique Snapchatters reached by ad partners, delivering a 30% increase in reach on average in the U.S. 

As for its subscription program, Snapchat+, the social media company says that subscribers doubled in 2024, from 7 million to 14 million, in 2024. The service now brings in an additional $500 million in annual revenue. Comparing Snapchat+’s growth to Q3 results shows the addition of 2 million more paying users in Q4.  

Snapchat+ makes the company a leader in verification-based paid services, surpassing Facebook and X, but still lagging behind premium services from much larger platforms like LinkedIn and YouTube. 

Snap’s investment in creator monetization opportunities and Spotlight, its TikTok-like video feed, have also made a positive impact on in-app content sharing.

In Q4, Snap says, more than a billion Snaps were shared publicly each month, which marks a shift from traditionally private sharing behaviors common in the platform.

Snap also says that it onboarded “thousands of creators” to its “Snap Star” program, while the number of creators posting content grew more than 40% year-over-year. 

Looking forward, Snap is focusing on bringing its newly developed generative AI model, which the company says is capable of creating high-resolution images on mobile devices “in just seconds,” to its current suite of AI features, like AI Snaps, AI Bitmoji Backgrounds, and more. 

The company says it will offer “high-quality AI tools at a lower operating cost,” because its AI model runs solely on mobile devices, reducing computational costs compared to server-based models.