Snap Reported a 57% YoY Increase in Revneue in Q3 2021

The instant messaging company Snap reported its third-quarter (Q3) results on Thursday. It posted a 57% year-over-year (YoY) increase in revenue to USD 1.06 Billion in this quarter. Moreover, the company’s EBITDA improved by 209% since the last year same quarter. Snap also mentioned its net loss has reduced 64% YoY from USD 199.8 Million to USD 71.9 Million.

Snap reported that its daily active users have significantly increased by 23% YoY to 306 Million. The company’s operating cash flow was USD 72 Million in Q3 2020 while it was USD 55 Million last year same period. However, its free cash flow was reduced to USD 52 Million from USD 70 Million in Q3 2020. It also mentioned its investments in content offerings. For instance, it launched Spotlight Challenges in the US. Under this challenge, it will reward the top-performing submissions with monetary prices.

Executives Statement on Earnings Report

Snap celebrated its 10th anniversary this quarter, and we are excited about the long-term opportunity and potential for our business, as we grew our community to 306 million daily active users, and grew our revenue 57% year-over-year to reach $1.067 billion for the quarter,” said Snap’s CEO, Evan Spiegel.

“We’re now operating at the scale necessary to navigate significant headwinds, including changes to the iOS platform that impact the way advertising is targeted, measured, and optimized, as well as global supply chain issues and labor shortages impacting our partners. We will continue to focus on delivering strong results for our advertising partners and innovating to expand the capabilities of our platform and better serve our community,” he added in the statement.

Company’s Latest Developments

Snap said that it has launched the next generation of Scan, which has new features and allows the users to access its search capabilities from the user’s Camera. The company said that its five augmented reality lenses, which are powered by SnapML, generated more than one billion impressions each. Talking about new partnerships, Snap partnered with SignAll to introduce three AR lenses and teach the users American sign language. It also joined forces with Sotheby’s to launch ‘The Final Christo: Original Works for The Arc de Triomphe’ lens for users.

Apple’s Potential Harm to Its Future Growth

Apple’s privacy policies have created hindrances for many companies, including Facebook and Snap. Post the earnings report, Evan Spiegel said that Apple’s change in privacy settings has impacted its advertising business. “While we anticipated some degree of business disruption, the new Apple-provided measurement solution did not scale as we had expected, making it more difficult for our advertising partners to measure and manage their ad campaigns for iOS,” he said.

The instant messaging company’s share tanked 20% on Thursday, while other social media companies such as Facebook and Twitter witnessed a downfall of nearly 7% in after-hours trading. Snap’s CFO Derek Anderson said that the company’s Q4 revenue would be between USD 1.16 Billion and USD 1.20 Billion. “Unfortunately, these changes are occurring during a season when our advertising partners would normally expect their supply chains to be operating at peak capacity, and at a time when we would otherwise expect peak advertising demand to drive peak contestation, and therefore peak pricing, in our auction,” CFO said.

Evan Spiegel: My Aim is to Make Snapchat Safer

Various social media platforms are under scrutiny owing to their impact on teenagers. For instance, Facebook was found to be in hot water after whistleblower France Haugen said that the company prioritizes profits over safety. This week, Spiegel said in his interview with Wall Street Journal that “One of the goals with the product is to open up a dialogue between parents and their children about their experiences on the app.”