Snap has finally turned a profit nearly five years after going public. The firm announced the achievement in its fourth-quarter results report, which showed a net income of $23 million.
This may be a small portion of the firm’s $4.1 billion in quarterly sales, but it’s a significant move for the corporation, which has battled with user growth in the past. However, Snapchat’s problems appear to be behind it, as daily active users grew to 319 million, up 13 million for the second quarter in a row. Overall, DAUs increased by 20% in 2021.
Snap has finally proved to be profitable
Snap’s numbers came a day after Meta announced that Facebook’s daily active users had decreased for the first time in company history, which was particularly good news for stockholders. The company’s market valuation was wiped out by. It is more than $200 billion as a result of the stock drop. Meanwhile, news of Snap’s profitability and strong user growth boosted the company’s shares by more than 50% in after-hours trade.
Snap, like Facebook, has already stated that Apple’s privacy measures have harmed its ad revenue, with CEO Evan Spiegel describing it as a “frustrating setback” last quarter. Snap, on the other hand, appears to be handling those adjustments with greater ease presently. CFO Derek Andersen complimented Snapchat’s privacy-centric strategy during a discussion with analysts on Thursday.
Good news coming from users
Spiegel also discussed how the epidemic has affected the behaviour of Snapchat users. “People are posting fewer Stories to their friends and viewing fewer Stories from their friends,” said Spiegel. “At the same time, we’ve noticed that people are watching more premium material and more Spotlight stuff.”
Snapchat’s Spotlight is a short-form video tool similar to TikTok. With over 12,000 creators getting compensation from Spotlight in its first year Spiegel praised the feature with helping to develop Snapchat’s creator community. “We now see three times as many monthly postings per creator as we did a year ago when Spotlight first started,” he added.