• by Colin Kirkland , 10 hours ago

Snapchat’s first-quarter earnings report showcases its steady advertising business and plans for the upcoming release of its AR Specs, while maintaining overall progress toward its goal of reaching 1 billion monthly users, but marking a continued quarter-to-quarter decrease in users across crucial markets.

In Q1, Snapchat added 9 million daily active users since Q4, reaching 483 million total DAUs -- a 5% year-over-year boost.

During the company’s previous quarter, it lost 3 million users due to a nationwide ban in Russia and the impact of Australia’s recent teen social media ban. 

Snapchat’s MAUs also showed a 5% year-over-year lift, with 956 million across the globe.

However, according to the company’s earnings report, DAUs have been falling in the U.S. and Europe for several consecutive quarters, leading to investor concern about long-term revenue-per-user.

The social-media company saw a year-over-year increase in revenue-per-user across all markets, but a quarterly dip, with the most significant decrease in the U.S., Snap’s most profitable market at $9.23 per user.  

Overall, Snap brought in a total revenue of $1.53 billion in Q1, marking a 12% bump year-over-year.

The company’s chat-based ad format, Sponsored Snaps, delivered a 226% increase in per-impression click-through rates and a 59% boost in 7-day conversion volume, alongside the newly launched AI Sponsored Snaps chatbot-powered offering. 

Snap’s Dynamic Product Ads revenue grew more than 30% year-over-year, doubling adoption among small and medium-sized businesses.

Snapchat+ subscriptions and growing interest in Lens+ contributed to a 87% year-over-year increase in Other Revenue, which hit $285 million this quarter. 

“We remain focused on disciplined execution as we invest in Specs and our long-term opportunity in intelligent eyewear,” said CEO Evan Spiegel, who remarked again on the company’s “crucible moment” in April, when cutting 1,000 jobs and closing over 300 open roles.

As Snapchat attempts to “establish a clearer path to net-income profitability,” per Spiegel, the company is investing heavily in its upcoming AR wearables, expanding its partnership with Qualcomm Technologies to implement the use of its Snapdragon AI chip to power the new generation of Specs. 

“As we move into Q2, we remain focused on accelerating our topline, growing our community, deepening engagement, improving financial efficiency, and advancing toward the commercial launch of Specs later this year,” the company’s investor letter reads.