Snap finally has some good news to share
Don’t call it a comeback just yet, but Snap’s broken its losing streak.
For the first time, Snap beat industry and Wall Street expectations for daily user growth and quarterly revenues. For the full year of 2017, Snap earned $824.9 million in revenue. The company continues to lose money, but things are certainly looking brighter for Snap today than yesterday. Here’s what you need to know from Snap’s earnings:
The key numbers:
- 187 million daily users (+8.9 million from previous quarter)
- $285.6 million in quarterly revenue (+$77.6 million)
- $1.53 average revenue per user (+.36 cents)
- $350 million in losses in the fourth quarter
- More than 90 percent of Snap Ads were bought programmatically last quarter
- $100 million in revenue generated for Snapchat content partners in 2017
About that redesign…
During Snap’s third-quarter earnings call this past fall, Spiegel admitted that Snapchat was hard to use, one of the reasons the app hasn’t taken off the way investors and analysts hoped (the other, bigger reason: Facebook). Since announcing a redesign that would separate user posts and messages from media content, Snap has been quiet on when the new changes will launch.
Spiegel said the initial tests on the redesign have been promising. In one of the first test markets, daily users for Snapchat Discover channels grew by 40 percent following the redesign, he said. The full rollout is coming sometime in the first quarter.
According to Spiegel: “Every week, on average, more than half of the entire 13-34-year-old population of the United States plays with augmented reality Lenses in Snapchat.”
More stories everywhere:
After noting how Snap is now making its stories available outside of Snapchat, Spiegel said: “We’ve also started bringing Snaps to bigger screens like stadium jumbotrons at this year’s Rose Bowl and Sugar Bowl. Removing friction from the way people use Snapchat and view Snaps will help us continue to grow our community over the coming year.”
Keep in mind:
The majority of Snap’s revenue is generated through brand advertising, which seasonally peaks in the fourth quarter, Snap CFO Drew Vollero said. Snap is also transitioning the creative tools business to the programmatic platform, which it believes will drive additional impressions at lower prices and result in more modest growth in the first half of 2018.
In the first quarter of 2017, Snap made $8 million from Spectacles revenue, which it expects to be “substantially down year-over-year.”
What Wall Street was expecting:
Wall Street, already bearish on Snap, expected Snapchat to add six million new daily users last quarter and revenue of $253 million, according to Recode. Snap beat both expectations by substantial margins. Unsurprisingly, Snap shares skyrocketed by as much as 29 percent following the earnings release — which should give Snap a bit of a cover until it has to beat expectations once again in three months.
The Android factor:
This is the most Snapchat has grown daily users since Instagram copied the app with Instagram Stories. CEO Evan Spiegel attributed some of the user growth to improvements Snapchat made to its Android app; the retention rate of new Snapchat users on Android increased by 20 percent over the previous year, he said.
Everyone is as surprised as you:
Holy Toledo — $SNAP is up 23% on earnings!
— alexei oreskovic (@lexnfx) February 6, 2018
Now hiring: The FTC seeks ad tech and social media experts as it shifts its approach to investigating data abuses
The FTC's chief technologist aims to shift away from reliance on legalistic remedies to stop data abuses and wants technologists who understand ad tech and algorithms to help.
LinkedIn looks to premium publishers as a way to drive subscriber revenue
The pilot program is designed to drive subscriber revenue for both participating publishers as well as LinkedIn.
How Yahoo is experimenting with platforms and partnerships to grow its audience
Yahoo wants to get fanatics for sports, finance and lifestyle all actively spending within its owned and operated portfolio of media brands.
SponsoredHow the ad industry can use its borrowed time to future-proof first-party data solutions
Trent Lloyd, co-founder and head of brand solutions, Eyeota Google’s updated timeline for its Privacy Sandbox rollout, including its two-year delay of third-party cookie deprecation on Chrome, didn’t come as a surprise to many industry observers, given the limited utility of Google’s FLoC and the slow momentum of the Privacy Sandbox in the World Wide […]
In some California privacy cases, analytics trackers are in the crosshairs — and violators could be charged by the cookie
Letters companies have received from the state's attorney general ask them for details about cookie tracking for ads and analytics.
The Financial Times plans to open 2 more U.S. bureaus to target ‘global Americans’
The Financial Times, with investment from owner Nikkei, is opening new bureaus in the U.S. to cover American companies that are players on a global scale, for U.S. readers.