Snap’s Q3 results disappoint markets despite user growth

Snap Inc, the parent company of Snapchat, has just unveiled its results for the quarter ending September 30, 2002. For this period, daily active users increased 19% y-o-y to 363 million and revenues grew 6% to $1.128m. This, however, was offset by widening losses, $360 million, and sent the share price tumbling by 25%.

Evan Spiegel

The losses came despite major cutbacks in staff and expenditure – and the company expects revenue growth to slow towards the end of this year because of economic conditions. Nevertheless, CEO Evan Spiegel preferred to focus on the platform’s longer-term potential. “This quarter we took action to further focus our business on our three strategic priorities: growing our community and deepening their engagement with our products, reaccelerating and diversifying our revenue growth, and investing in augmented reality. The growth of our community continues to expand our long-term opportunity as we navigate this volatile macroeconomic environment.”

As part of its cutbacks, Snap ended its Snapchat Originals programme. On more positive trends, it said total time spent watching shortform Spotlight content grew 55% year-over-year. There was also a 40% increase in daily average time spent by 35 and older users watching shows and publisher content. The company also launched its Snapchat Sounds Creator Fund, providing monthly grants to emerging artists for their role in driving video creations, inspiring trends, and defining cultural moments.

In terms of revenue growth, Snap is focusing on Snapchat+, “our subscription service for exclusive, experimental, and pre-release features. This reached 1.5 million paying subscribers in Q3 and is now offered in over 170 countries.” There were also various initiatives aimed at facilitating advertisers and driving AR capabilities. To celebrate HBO’s premiere of House of the Dragon, Snap worked with Lens Creators to build custom Landmarkers that brought the show’s dragons off the TV and into the sky.