Snap reported better-than-expected first-quarter results, with earnings per share of 3 cents adjusted versus a loss of 5 cents expected by analysts, and revenue of $1.19 billion versus $1.12 billion expected. The company saw 422 million daily active users, higher than the expected 420 million, and average revenue per user of $2.83 versus $2.67 expected. Revenue for the quarter increased by 21%, largely driven by improvements in the advertising platform and demand for direct-response advertising solutions. Advertising revenue reached $1.11 billion, with the “Other Revenue” category, driven by Snapchat+ subscribers, up 194% year over year.
Adjusted EBITDA for the quarter was $46 million, surpassing the $68 million loss expected by analysts. Snap credited operating expense discipline and accelerating revenue growth for this better-than-expected performance. The company expressed confidence in its progress with the ad platform, leadership team, and strategic priorities set, indicating optimism for continued business performance improvement. However, Snap’s growth acceleration still lagged behind that of Meta, which reported 27% growth in its first-quarter results.
Snap’s net loss narrowed to $305.1 million from $328.7 million the year prior, translating to a loss of 19 cents per share. For the second quarter, Snap expects revenue between $1.23 billion and $1.26 billion, and adjusted EBITDA between $15 million and $45 million. The company anticipates reporting around 431 million daily active users in the second quarter and provided a forecast for its full-year 2024 cost structure, aiming to manage infrastructure costs per user.
Snap highlighted the growth in user engagement, particularly with Spotlight and Creator Stories, with time spent watching such content increasing year over year. The company had previously announced a 10% reduction in its global workforce in February, with plans for modest growth in headcount and personnel costs for the remainder of the year. Snap will hold its quarterly call with investors to discuss these results further.
Overall, Snap’s strong first-quarter results, with significant revenue growth and user engagement, demonstrate the success of the company’s efforts to rebuild its advertising business. With positive adjusted EBITDA and optimistic forecasts for the coming quarters, Snap appears to be on a path of continued improvement. The company’s focus on enhancing the ad platform, controlling expenses, and investing in long-term strategic priorities bodes well for its future performance and growth in a competitive digital advertising landscape.
