Snap Misses Q4 Forecasts, Stock Plunges Sharply
Snap’s revenue came in lighter than expected and its net loss was wider than anticipated — leading the Snapchat parent’s stock to drop more than 30% in after-hours trading Tuesday.
Snap reported fourth-quarter 2023 revenue $1.361 billion, up 5% year-over-year, and a net loss of $248 million, or a loss of 15 cents per share. Wall Street expected $1.38 billion in revenue and a net loss of 6 cents per share. Snapchat’s daily active users were 414 million in Q4, a gain of about 8 million in the period and up 10% year-over-year.
More from Variety
Snapchat Parent to Lay Off 10% of Workforce, About 540 Employees
Snap Q3 Revenue Rises 5%, Surprising Wall Street, as Snapchat Daily Users Grow to 406 Million
Snap Q2 Revenue Declines 4% as Ad Woes Persist, Stock Plummets on Weak Outlook
According to the company’s letter to shareholders, the “onset of the conflict in the Middle East,” referring to the Israel-Hamas war, was a “headwind” that reduced revenue growth by approximately 2 percentage points in Q4.
The Q4 results come out a day after the social media and messaging app maker announced that it would cut 10% of its workforce, laying off around 540 employees.
In Q1, the company said it expects reaching 420 million daily active users. “We are focused on executing against our roadmap to deliver improvements to our direct-response advertising platform to drive improved results for our advertising partners and accelerate topline growth,” Snap said. Guidance for the first quarter of 2024 is for revenue of $1.095 billion to $1.135 billion, implying year-over-year revenue growth of 11% to 15%. The company estimated adjusted EBITDA will be between negative $55 million and negative $95 million in Q1.
“2023 was a pivotal year for Snap, as we transformed our advertising business and continued to expand our global community, reaching 414 million daily active users,” Snap CEO Evan Spiegel said in a prepared statement. “Snapchat enhances relationships with friends, family, and the world, and this unique value proposition has provided a strong foundation to build our business for long-term growth.”
In Q4, Snapchat surpassed 800 million monthly active users (up from the last update of 750 million in February 2023) and hopes to hit the 1 billion MAUs mark in the next two years.
Snapchat+, the company’s subscription service that includes prerelease features, topped 7 million paying subscribers during Q4, and as of the end of 2023 had an annualized revenue run rate of $249 million, according to the company.
Also during the quarter, Snap signed a new publisher deal with Spotify covering the U.S. that will bring shorter-form highlights from Spotify’s podcasts to Snapchat Spotlight and Stories.
In Q4, according to the company, total time spent watching content on Spotlight — Snapchat’s TikTok-like short-form creator hub — increased more than 175% year-over-year.
Best of Variety
Sign up for Variety’s Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.
