Snapchat‘s parent continues to reel from a pullback in ad spending, with Snap posting $1.3 billion revenue for the fourth quarter of 2022 — up just 0.1% year-over-year, its lowest quarterly growth as a public company.
Snap reported revenue of $1.30 billion, essentially flat compared with Q4 of 2021. The company posted a net loss of $288.5 million for the quarter, which included restructuring charges of $34 million, compared with net income of $23 million in the prior year. The results translated into adjusted earnings per share of 14 cents. Wall Street analysts on average expected Snap to post revenue of $1.3 billion and adjusted EPS of 11 cents, according to Refinitiv.
The company did not provide specific guidance for Q1 revenue or adjusted earnings, citing “uncertainties related to the operating environment.” However, in its letter to shareholders, Snap said its internal forecast assumes revenue for the current quarter will be down 2%-10% versus Q1 2022. Through Jan. 31, “we’ve observed a year-over-year decline in revenue of approximately 7% quarter-to-date,” the company said.
Meanwhile, Snapchat continued to grow its user base: In Q4, the app’s average daily active users hit 375 million, up 12 million sequentially from 363million in the previous quarter (and up 17% from the year-earlier period).
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Snap shares fell more than 14% in after-hours trading on the Q4 earnings release.
“We continue to face significant headwinds as we look to accelerate revenue growth, and we are making progress driving improved return on investment for advertisers and innovating to deepen the engagement of our community,” CEO Evan Spiegel said in announcing the results.
Snap’s Q4 earnings report comes after the company missed Q3 expectations and in August laid off 20% of its workforce, nearly 1,300 employees. Last year, Snap wound down several initiatives, includingending its funding of nearly all Snapchat original series.
Amid the weak financial results, the company touted as a bright spot that overall time spent watching content globally in Q4 grew on a year-over-year basis, with total time spent watching user-generated Spotlight content more than doubling year-over-year. In addition, Snap said that 17 content partners reached over 50 million global viewers each in Q4 2022. Through its broadcast partnerships, Snap said more than 60 million Snapchat users watched 2022 FIFA World Cup content in Snapchat Stories, and more than 285 million Snapchatters engaged with World Cup AR lenses.
In addition, Snap said Snapchat+, its $3.99/month subscription service for exclusive, experimental and prerelease features, reached more than 2 million paying subscribers six months after launch (and up from more than 1.5 million in Q3).That said, Snapchat+ represents only a fraction of total revenue.
Snap has scheduled an Investor Day on Feb. 16 at its headquarters in Santa Monica, set to include presentations by Spiegel, CTO/co-founder Bobby Murphy and other execs.
