- Snap's Q4 revenue grew 44% year-over-year to a record $561 million as advertisers spent heavily during the holiday shopping season. Its image-messaging app Snapchat added 8 million daily active users (DAUs) to end its fourth straight quarter of growth at 218 million, per a company announcement.
- The company reported its first profit on an adjusted basis of $42 million, but warned of possible losses during the current quarter. Snap's average revenue per user (ARPU) expanded 23% to $2.58 in Q4 from a year earlier.
- In a conference call, company management touted Snapchat's ability to help advertisers like Ralph Lauren and PepsiCo's Mtn Dew reach its mostly Gen Z audience. Snap also started buying ads to gain the attention of media buyers, business chief Jeremi Gorman said during the call.
Snap's revenue growth reflects the company's efforts to make itself more relevant to a broader group of advertisers by touting its popularity among Generation Z and adding a wider range of ad formats. The growth outpaced Facebook's 25% increase to $20.7 billion and the 36% gain to $15.1 billion for Google's YouTube, though Snap had a smaller base for comparison. Twitter and Pinterest will report results tomorrow, providing a fuller picture of the broad social media marketplace. Snap also faces growing competition from new social video app TikTok, whose parent company doesn't disclose revenue figures.
Snap management cited its work to reach more advertisers, an effort that included new ad product rollouts. Just before the quarter began, Snap introduced Goal-Based Bidding to let advertisers target viewers who watch 15-second videos, and lifted the limit on video ads to three minutes from 10 seconds, among other new offerings. The company also piloted dynamic advertising to let marketers create templates that pull in images and product information from a catalog and deliver them to targeted users.
While its North American revenue expanded 42% to $382 million from a year earlier, Snap again saw higher growth overseas, with a 47% gain in Europe to $92 million and a 49% lift to $87 million in the rest of the world. The company's Q4 loss grew to $240.7 million from $191.7 million a year earlier, and included a payment of $187.5 million for legal settlements. Snap forecast revenue of $450 million to $470 million for the current quarter, better than the analyst consensus estimate of $461 million, CNBC reported.