Snap Reports 15% Revenue Surge to $1.37 Billion in Q3 2024, 443 Million Daily Users

Snap Inc., the social media giant behind Snapchat, reported a revenue rise to $1.37 billion for the third quarter of 2024, marking a 15% increase from $1.19 billion in the same period last year. 

This growth, accompanied by a daily active user base climbing to 443 million, results from Snap’s recent emphasis on enhancing user engagement through its advancements in artificial intelligence (AI) and augmented reality (AR).

The CEO, Evan Spiegel, noted the company’s achievements, crediting their investment in cutting-edge technology as key to the platform’s growth.

“Our efforts have not only spurred community engagement but have also solidified our financial trajectory,” Spiegel said, pointing to AI and AR features as key drivers of creative and interactive experiences that resonate with users and advertisers alike.

In addition to its revenue surge, Snap authorised a $500 million stock repurchase programme aimed at offsetting stock dilution and bolstering employee ownership. 

This buyback initiative, which will unfold over the next 12 months, is subject to market conditions and reflects Snap’s robust financial position, with cash reserves and securities totalling $3.2 billion as of September’s end.

Snap’s performance metrics showed improvements across several areas. The company slashed its net loss to $153 million, down from $368 million the previous year, representing a 58% reduction. Adjusted EBITDA jumped to $132 million, an increase from $40 million, while free cash flow shifted from a negative $61 million last year to $72 million. 

Again, operating cash flow increased to $116 million, further pointing to Snap’s strides in operational efficiency.

The company’s subscription service, Snapchat+, also continued to gain traction, amassing over 12 million subscribers by the quarter’s end—a rise since its introduction in 2022. 

This service, designed for users seeking exclusive features, has diversified Snap’s revenue streams and reinforced user loyalty through access to premium content.

Snap’s active user engagement further grew, with time spent on the platform increasing by 25%, and its video-sharing feature, Spotlight, reaching more than 500 million monthly active users—a 21% uptick compared to last year. 

The platform’s ad business has also expanded with the addition of new formats such as Sponsored Snaps and Promoted Places, aiming to connect brands with its youthful audience in innovative ways.

However, the company’s fourth-quarter revenue forecast of $1.51 to $1.56 billion fell slightly short of analyst expectations. Despite this cautious outlook, Snap remains focused on facilitating long-term growth through further development in AI-driven creative tools and AR, as seen with the launch of the latest Spectacles—a limited-release AR wearable designed for developers. 

This product launch places Snap alongside other tech giants vying for leadership in the AR space, signalling its commitment to exploring new dimensions of digital interaction.

While Snap’s stock rebounded, surging over 10% in after-hours trading, the platform faces challenges from competitors with larger user bases and resources, like Meta and TikTok.