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
How publishers are future proofing their commerce offerings for post-pandemic consumers
Four publishers gathered at Digiday Media's Commerce for Publishers Forum to talk about their affiliate programs and strategies.
Member ExclusiveMedia Briefing: Publishers and media unions are still haggling over office-return plans heading into the summer
In this week's Media Briefing, senior media reporter Sara Guaglione reports on how unions at some major media companies are pushing back against publishers' return to office mandates, with The New York Times Guild seemingly netting a victory on Wednesday.
‘He thought I was accusing him of being racist’: Confessions of a comms pro on working with out of touch leadership
The [CEO] and one of the other co-founders felt the need to point out that they mentor black people and donate to black-focused charities. 'It wasn't about them, but they were making it about them.'
SponsoredHow marketers and retailers are unlocking the true value of retail media
Ben Kneen, senior director of product management, Xandr It’s a challenging time for retailers in the advertising industry. As they cope with supply chain woes and inflation-related pressures, they seek high-margin revenue streams amid evolving privacy regulations and massive shifts in identity solutions — including IDFA, the deprecation of third-party cookies and more. In light […]
As economic uncertainty grows, senior media buyers expect decent upfront pricing options across linear and digital
TV sellers face a steeper uphill climb to sell billions of ad time in advance, as market indicators look increasingly gloomy. But that's not stopping one seller from seeking aggressive pricing and volume gains.
How Microsoft plans to storm adland: ‘Attribution, CTV, in-game ads and potential M&A’
Microsoft Advertising VP Rob Wilk explains how it plans to burnish its $10bn ad business