Snap's DAUs increased 10 percent YoY to 422 million; Q1 2024 revenue increased to $1,195 million

Snap Inc. announced financial results for the quarter ended March 31, 2024. “The value we provide our community and advertising partners has translated into improved financial performance,” said Evan Spiegel, CEO. “Our large, growing, and hard-to-reach community, brand-safe environment, and full-funnel advertising solutions have made us an increasingly important partner for businesses of all sizes.”

Q1 2024 Financial Summary

Revenue was $1,195 million, compared to $989 million in the prior year, an increase of 21% year-over-year. Net loss was $305 million, compared to $329 million in the prior year. Adjusted EBITDA was $46 million, compared to $1 million in the prior year. Operating cash flow was $88 million, compared to $151 million in the prior year. Free Cash Flow was $38 million, compared to $103 million in the prior year.

Q1 2024 Summary & Key Highlights

Snap Inc said it grew and deepened its engagement with its community. It's DAUs were 422 million in Q1 2024, an increase of 39 million, or 10%, year-over-year. Total time spent watching Spotlight content increased more than 125% year-over-year. The growth in the Snap Star program has been an important driver of engagement in North America, with total time spent watching Stories from Snap Stars growing more than 55% year-over-year in North America. "We onboarded over 1,500 Snap Stars in Q1, which has helped generate quarter-over-quarter growth in Story posts, Spotlight posts, and Stories time spent for Snap Stars globally. We introduced new tools to help our community make more creative Snaps, including new Creative Templates, the ability to post longer videos, and access to AI-powered AR Lens creation," the company shared.

Stating that Snap Inc is focused on accelerating and diversifying its revenue growth, the company said that Snapchat+ subscribers more than tripled year-over-year, surpassing 9 million subscribers in Q1. The number of small and medium sized advertisers on Snapchat increased 85% year-over-year. Ongoing momentum with our 7-0 Pixel Purchase optimization model led to a more than 75% increase in purchase related conversions year-over-year.

"We launched a new and improved version of Conversions API (CAPI) available to all advertisers that offers easier set up with reduced integration times. We partnered with Snowflake to enable advertisers to easily implement our CAPI solutions without needing to build a bespoke back-end integration. Our improvements to CAPI and improved collaboration with advertisers has resulted in CAPI integrations growing approximately 300% year-over-year in Q1 2024," Snap Inc stated.

The company launched Sponsored AR Filters, its new AR ad offering that expands advertisers’ reach via the Snapchat Camera and enables Snapchatters to overlay sponsored AR content on their Snaps after a photo or video is captured. It also announced partnerships with Traackr, Lumen Research, OMD, Amplified Intelligence, and Fospha to empower advertisers with more campaign tools and insights.

Snap announced two new brand safety solutions for advertisers: a third-party measurement product in partnership with Integral Ad Science, a leading global media measurement and optimization platform, to provide advertisers with increased transparency across their Snapchat campaigns, and a first-party tool that allows advertisers greater control over where their ads appear.

Snap is also investing in its augmented reality platform. "We continue to invest in Generative AI models and automation for the creation of ML and AI Lenses, which contributed to the number of ML and AI Lenses viewed by Snapchatters increasing by more than 50% year-over-year. We invested in relationship-centered AR Formats that drove outsized sharing among US Snapchatters including “Friend Lenses” that feature friends in Quizzes and other experiences, and “Q&A Lenses” that prompt Snapchatters to send fun text and image responses to their Friends. We implemented an improved AR Carousel ranking model that refreshes AR lenses more frequently, making it easier to discover new Lenses, driving a more than 50% increase in the number of new Lenses seen in the carousel by Snapchatters since launch."

Snap integrated a new AI Assistant in Lens Studio that answers developer questions based on its documentation and tutorials to guide developers and help build Lenses more easily. It also launched a new Compression tool in Lens Studio to easily reduce the size of assets and optimize Lenses in order to improve the Lens creation experience on Snapchat. Other launches include an Animation Curve Editor in Lens Studio, a new interface for developers to edit animations inside Lens Studio — the first of many foundational animation tools coming soon, Snap stated. At Super Bowl LVIII, the NFL integrated Snapchat's Camera Kit technology at Allegiant Stadium in Las Vegas — the first time a Super Bowl host stadium has integrated Snap Inc's technology.

Q2 2024 Outlook

Snap Inc shared in a statement, "As we enter Q2, we anticipate continued growth of our global community, and as a result, our Q2 guidance is built on the assumption that DAU will be approximately 431 million in Q2. We are focused on executing against our roadmap to deliver improvements to our DR advertising platform to drive improved results for our advertising partners and accelerate topline growth. Our Q2 guidance range for revenue is $1,225 million to $1,255 million, implying year-over-year revenue growth of 15% to 18%. Given the revenue range above, and our investment plans for the quarter ahead, we estimate that Adjusted EBITDA will be between $15 million and $45 million in Q2."