Snap Inc, the company behind the popular social media app Snapchat has shared its earnings call for Q4 2022. It details yet another slightly disappointing report for the company’s investors.
The company reported a 28% decrease in shares during its Q3 earnings report last year in October and lost 39% of its stock after releasing its Q2 report in July. It has now recorded a decrease of 14% in shares.
However, Snap did record an increase in revenue for its Q4 2022 earnings report compared to the previous year. Similar to behemoth competitors such as Twitter and Meta, 2022 was mostly an unfavourable year for Snap due to a sluggish economy that forced many businesses to cut digital ad budgets.
Leaving behind a tough year
“We ended a challenging 2022 with 375 million Daily Active Users, 12% year-over-year annual revenue growth, and positive full-year Free Cash Flow,” said Evan Spiegel, CEO. “We continue to face significant headwinds as we look to accelerate revenue growth, and we are making progress driving improved return on investment for advertisers and innovating to deepen the engagement of our community.”
A statement from the company also shows that sales climbed 12% to 4.6 billion in 2022, “reflecting the rapid deceleration in digital advertising growth.” In the same earnings statement, Snap stated that it wouldn’t provide guidance for the next period.
The company’s investor letter shows that Snap’s “internal forecast assumes revenue will be between -10% to -2% year-over-year in Q1″ of last year, despite analysts expecting little increase in revenue.
Snapchat and its future in AR
“As we look forward to Q1, we expect to continue to deliver strong growth in our global community and, as a result, we anticipate DAU will be between 382 and 384 million in Q1 2023. On the monetization side, we anticipate that the operating environment will remain challenging, as we expect the headwinds we have faced over the past year to persist throughout Q1,” the company said in the letter.
After Snap released its earnings report, Meta shares dropped 2% while that of Pinterest dropped nearly 5%. The Snapchat parent company also recorded its second-worst year in 2022 when it saw a massive 81% decline in stocks.
However, the company has recouped some of its losses and is now prioritising the development of its AR glasses as well as growing its Snapchat community and engagements with Snapchat+, a service that has garnered more than 2 million premium subscribers as of Q4 last year.
It hasn’t been smooth sailing for tech companies ever since the economic downturn that has led to multiple companies laying off employees. Snap will be holding its Investor Day on February 16 where investors will be given a clearer picture of the market’s current state.
Isa Muhammad is a writer and video game journalist covering many aspects of entertainment media including the film industry. He's steadily writing his way to the sharp end of journalism and enjoys staying informed. If he's not reading, playing video games or catching up on his favourite TV series, then he's probably writing about them.
