Snap (SNAP) Q1 2024 earnings

Evan Spiegel, CEO of Snap Inc., speaks onstage during the Snap Partner Summit 2023 at Barker Hangar on April 19, 2023 in Santa Monica, California. 

Joe Scarnici | Getty Images Entertainment | Getty Images

Snap reported first-quarter results on Thursday that beat analysts’ estimates and showed a return to double-digit revenue growth. Shares soared more than 31% in extended trading.  

Here’s how the company did: 

  • Earnings per share: 3 cents adjusted vs. a loss of 5 cents expected by LSEG
  • Revenue: $1.19 billion vs. $1.12 billion expected by LSEG
  • Global daily active users: 422 million vs. 420 million expected, according to StreetAccount
  • Average revenue per user: $2.83 vs. $2.67 expected, according to StreetAccount

Revenue for Snap’s first quarter increased 21% from $989 million in the same period last year. The company is growing at an accelerated clip, after it had previously reported six straight quarters of single-digit growth or sales declines.

Snap has been working to rebuild its ad business after the digital ad market stumbled in 2022, and it’s starting to pay off. In its investor letter, Snap said its revenue growth was primarily driven by improvements in the company’s advertising platform, as well as demand for its direct-response advertising solutions. 

Advertising revenue came in at $1.11 billion in the first quarter. Snap’s “Other Revenue” category, which is primarily driven by Snapchat+ subscribers, reached $87 million, an increase of 194% year over year. Snap reported more than 9 million Snapchat+ subscribers for the period.

Adjusted EBITDA for the first quarter was $46 million, far surpassing the $68 million loss expected by analysts, according to StreetAccount. In its investor letter, Snap said adjusted EBITDA “exceeded our expectations” and was primarily driven by operating expense discipline, as well as accelerating revenue growth.

“Given the progress we have made with our ad platform, the leadership team we have built, and the strategic priorities we have set, we believe we are well positioned to continue to improve our business performance,” Snap wrote in the letter. 

Though Snap’s growth accelerated, it still fell behind that of Meta, which reported 27% growth in its better-than-expected first-quarter results on Wednesday. Meta shares plunged anyway after the company issued a light forecast and spooked investors with talk of its long-term investments.

Snap’s net loss for the quarter narrowed to $305.1 million, or a 19 cent loss per share, from $328.7 million, or a 21 cent loss per share, the year prior. 

For its second quarter, Snap expects to report revenue between $1.23 billion and $1.26 billion, up from the $1.22 billion expected by analysts, according to StreetAccount. Snap said adjusted EBITDA will fall between $15 million and $45 million, compared to Wall Street’s expectations of $15.5 million. 

Snap reported 422 million daily active users (DAUs) in the first quarter, up 10% year over year. The company expects to report around 431 million DAUs in its second quarter, up from the 430 million expected by StreetAccount. 

The company also provided a forecast for its full-year 2024 cost structure. Snap said quarterly infrastructure costs per DAU will fall between 83 cents and 85 cents for the rest of the year.

“We will continue to assess our infrastructure investment levels based on what is in the best long-term interest of our business,” Snap said. 

Snap said the amount of time users spent watching content grew year over year, primarily due to engagement with Spotlight and Creator Stories. The company said time spent watching Spotlight, which aggregates content from users, increased 125% year over year.

In February, Snap announced it would lay off 10% of its global workforce, or around 500 employees. The company said Thursday that headcount and personnel costs will “grow modestly” through the rest of the year. 

Snap will hold its quarterly call with investors at 5:30 p.m. ET Thursday. 

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