By
Chimamanda U. Martha
February 13th, 2024
Snap’s GAAP net loss in Q3 2023 increased by 2% year-on-year to $368 million or 23 cents per share.
Snapchat parent company Snap Inc (NYSE: SNAP) shares fell flat after surging as much as 20% in after-hours trading as the news that some advertisers had suspended ad spending following the start of the war in the Middle East reached investors. At the time of writing, SNAP stock is at around 1.2% up in the pre-market.
According to this CNBC report, the company revealed that it has “observed pauses in spending from a large number of primarily brand-oriented advertising campaigns immediately following the onset of the war in the Middle East”, with the results already evident in the current quarter’s sales.
Snap’s Q3 revenue increased by 5% from last year’s $1.13 billion to $1.19 billion during the same period, marking a return to sales growth and beating analysts’ projected $1.11 billion. The company reported earnings per share of 2 cents, a drop from last year’s 8 cents per share in the third quarter. Snapchat’s Global Daily Active Users were 406 million, higher than the 405.7 million expected. Its average revenue per user was $2.93 against the projected $2.74.
In its “internal forecast”, Snap projects that fourth-quarter sales could range between $1.32 billion and $1.38 billion. Analysts estimate the metric at $1.33 billion. The firm refrained from providing official Q4 guidance like it had for Q3 “due to the unpredictable nature of war”.
Snap’s GAAP net loss in Q3 2023 increased by 2% year-on-year to $368 million or 23 cents per share. Its $3.99 subscription service Snapchat+ hit over five million subscribers last quarter, an increase from four million in the quarter before.
In a statement, the company’s CEO and co-founder Evan Spiegel highlighted Snap’s “positive growth in Q3” and outlined the various cost-cutting measures employed to improve the business. Last summer, Snap announced that it would cut its 6000-member team by 20%. In September, it revealed that it was boarding up its augmented reality enterprise business, resulting in the exit of 170 workers.
“We are focused on improving our advertising platform to drive higher return on investment for our advertising partners, and we have evolved our go-to-market efforts to better serve our partners and drive customer success,” Spiegel said.
Snap has also revealed that its Chief Operating Officer, Jerry Hunter, is leaving the company after seven years. In addition, the has authorized a stock repurchase program of up to $500 million. It revealed that it had $3.6 billion in cash, cash equivalents, and marketable securities as of September 30, 2023.
The company also announced that since the official launch of its free AI chatbot My AI in April this year, more than 200 million people have sent more than 20 billion messages on the service. According to the company, that makes My AI “one of the most-used AI chatbots available today”.