Snap’s growth dominance stands to be questioned — what are the asks?

“Snap needs to demonstrate that it can maneuver out of ‘small platform syndrome,’ which is a state of being too small as a potential source of revenue for any advertiser to motivate them to adopt native platform tools like CAPI,” added Eric Seufert, independent investor and analyst.

Here are seven key questions analysts will want answered during that 5 pm E.T. call. Snap didn’t immediately return Digiday’s request for comment.

1. How will Snap ensure the platform isn’t an afterthought during this period of economic uncertainty?

President Donald Trump’s tariffs are impacting globally, with analysts revising forecasts and predicting a slowdown for 2025. And with that comes budget cuts — marketing typically being the first. Which is why it’s important for platforms like Snapchat, which aren’t usually considered a must-have on media plans, to do all they can to avoid being the easy option to strip first from social media mixes.

“Building up more direct response spend is a sensible approach to address more sources of demand, increase the number of advertisers, and be more resilient during the next period of ads slowdown,” suggested Jamie MacEwan, senior research analyst at Enders Analysis. Analysts like MacEwan will be eagerly listening to hear what Snapchat is doing to combat this issue and keep revenue growing during this tumultuous time.

2. How much of a positive impact has Simple Snapchat had on the app?

Last September, Snap began testing “Simple Snapchat” — a new, simplified version of its app, with the view to officially roll it out during Q1 2025. The idea was to make Snapchat more user-friendly. Get it right, and the simplified app could encourage new users to sign up, and subsequently more advertisers would follow. But Simple Snapchat could pose an uphill battle that could stall momentum if mishandled.

“We’ll be looking at what product changes like Simple Snapchat mean for ad load, which has historically been low compared to Meta or TikTok,” MacEwan said.

3. How is Snap planning to improve user ARPU?

No one can discount the fact that Snapchat’s users are growing, having reached 850 million monthly active users (MAUs) last quarter, up from around 800 million MAUs in Q3 2024. However, the problem for Snap has never been about its user base. It’s been about monetizing it. Unless that changes, MacEwan said “Snap will continue to fall far short of market-leading ARPU at Meta and Google.”

“Snap operates on a much smaller scale than YouTube, Meta and TikTok, and our sources indicate that its users spend much less time per day with Snapchat than other social platforms,” said Matthew Bailey, senior principal analyst, advertising at Omdia. “Snap is still facing an uphill battle to not just compete with these other social platforms for users, but also grow the engagement of those users. It needs to show that it has the ability to do this, whether that is through new features or more advanced content surfacing mechanisms.”

4. What is Snap doing to capture more lower funnel spend?

While Snap had been working on its lower funnel capabilities as early as 2019, its efforts intensified throughout last year, through ongoing product development, such as its smart budget optimization feature as well as partnerships. This is also why the app has experienced more success recently securing SMB budgets. What’s key is for Snap to build on this momentum, and further bring itself more in line with its platform peers with more lower funnel AI offerings.

“If Snap succeeds, we should see less drastic fluctuations in its fortunes, up or down, as previously Snap has been highly exposed to cutbacks at large brand advertisers,” said MacEwan. “This might help it to achieve more stable growth — while last year looked very good, this was partly off the back of an off year in 2023.”

5. How successful have Snap’s investments into SMBs been for revenue?

During the Q4 2024 earnings, CEO Evan Spiegel highlighted that SMBs were the “largest contributor” to ad spend last year, having been a big focus area for the team over the previous 12 months. The company made $5.36 billion in total revenue during 2024, though Spiegel didn’t share breakdowns.

“Snap needs to showcase that its investments into ads optimization are paying dividends for SMBs, which I think remains an open question,” said Eric Seufert, independent investor and analyst.

SMBs are typically one of the best ways for platforms to secure ongoing, consistent ad revenue, so they are not solely dependent on larger advertisers. Now Q1 2025 is done and dusted, are SMBs still the biggest contributor to ad revenue? Did the platform manage to entice even more SMBs during this quarter? The answers to all these questions and more will be key to knowing whether Snap is any closer to shedding its challenger status.

6. How is Snap planning to improve ad revenue growth alongside its non-ad revenue streams like subscriptions?

There’s no question that Snapchat is probably one of the most successful platforms with a subscription element. Despite only launching Snapchat+ in 2022, it’s already achieved more than 14 million paying subscribers. But as Digiday reported back in December, while it’s growing well, subscriptions are still just a small cog in Snap’s broader revenue machine. Advertising, for better or worse, is the bedrock of the business — and will be for years to come. 

“Snap needs to continue to innovate with new ad formats that are unique to the Snapchat platform and shorten the path to conversion,” Bailey said. “Snap has a good pedigree in innovating AR ad formats, but the next stage is to democratize such ads so that they are accessible to advertisers of all sizes. Generative AI-enabled creative tools will be a key part of this, so I would expect Snap to continue to highlight its investment in generative AI-enabled advertising solutions.”

7. TikTok’s ongoing uncertainty is an opportunity for other platforms to capitalize — what is Snap doing to benefit from this?

Back in January, Snapchat was one of a number of platforms which pursued TikTok ad dollars, in particular by highlighting the audience overlap between Snapchat and TikTok in the U.S. to advertisers during sales pitches.

Now while TikTok’s fate is still somewhat undecided, what else is Snapchat doing to seize the opportunity?