Snapchat Posts Strong Third Quarter Performance…But It’s Not Enough

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It's now Snapchat's turn to reveal its quarterly results for the period from June to September. While the social network is recording a nice increase in its revenues, its gap with the competition continues to grow.

Performance attributed to AI and paying subscribers

Thus, the ghost platform saw its turnover climb by 15%compared to the same period last year, reaching $1.37 billion. Its daily users also increased to 443 million, compared to the 441 million expected by analysts.

« I am proud of the progress the team has made this quarter, which has delivered strong community growth and deepened engagement while driving improved financial performance. “Our investments in AI and AR are fueling new creative experiences for our community and driving innovation across our advertising platform, supporting our long-term growth opportunity,” said Snapchat CEO Evan Spiegel.

He cited in particular the testing of a new video generation feature, which allows content to be created from a simple text query. ” Our efforts contributed to the number of creators publishing content increasing by approximately 50% compared to the previous year in the third quarter ,” assures Spiegel.

The paid subscription Snapchat+ is also a success. Available at 4.49 euros per month, it offers additional features to its members. Their number has doubled compared to last year, now reaching 12 million and generating 123 million dollars in additional revenue.

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© Presse-citron/Unsplash/Nicholas Cappello/George Pagan III/Snap Inc.

More losses

Despite an encouraging result, not everything is rosy for the social network. Although it has overhauled its advertising activity in recent years, it continues to post significant losses. In the third quarter, they were $153 million. Although this is still better than the 368 million estimated in 2023, it is still not enough.

Because the gap with its main competitors continues to widen. Snapchat’s user base is tiny compared to those of TikTok (1 billion) and Meta (3.3 billion). As a result, the company’s share price has fallen by 35% over the year, reflecting investors’ growing fears about its ability to truly compete with the two behemoths.

Another downside is that Snapchat’s forecast for the current quarter is less encouraging. It expects an increase of 8 million users, compared to an additional 11 million in the third fiscal year. Its turnover should be between 1.51 billion and 1.56 billion dollars.

• In the third quarter, Snapchat saw its revenue increase by 15%.
• CEO Evan Spiegel attributes this result to investments in AI and augmented reality.
• However, the performance gap between Snapchat and TikTok and Meta continues to widen drastically.

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