Snap shares rose in extended trading following the company’s better-than-expected Q4 earnings report. The social media platform reported $1.56 billion in revenue, slightly surpassing analysts’ estimates of $1.55 billion and marking a 14% year-over-year increase. Adjusted earnings per share (EPS) reached 16 cents, exceeding expectations of 14 cents.
The company’s global daily active users (DAUs) grew to 453 million, ahead of the projected 451.1 million. Meanwhile, the global average revenue per user (ARPU) remained steady at $3.44, in line with analyst estimates. Net income reached $9.1 million, a significant turnaround from the $248 million net loss recorded in the same period last year.
For Q1 2025, Snap anticipates revenue between $1.325 billion and $1.36 billion, with a midpoint of $1.34 billion, exceeding Wall Street’s $1.33 billion projection. However, adjusted earnings are expected to range between $40 million and $75 million, falling short of the $78.5 million analysts expected. The company attributes this to investment plans, which include hiring, legal expenses, and increased marketing spending.
Snapchat+ continues to expand, now boasting 14 million subscribers, up from 12 million in Q3. The premium subscription service, which launched in 2022, has been a key contributor to Snap’s “other revenue” segment, which grew 131% year-over-year and now has an annualized revenue run rate of over $500 million. CEO Evan Spiegel hinted at a potential subscription price increase, given its popularity.
Regarding AI advancements, Spiegel commented on DeepSeek’s breakthrough AI model, which has been more cost-efficient and faster to develop than similar models from major tech firms. He believes this validates the notion that AI models will become more accessible and commoditized over time.
Snap also acknowledged uncertainty surrounding a potential TikTok ban in the U.S., stating that advertisers and creators are looking to diversify their social media presence. This has benefited Snap, as brands explore alternative platforms for engagement.
Additionally, Snap announced that Ajit Mohan will become Chief Business Officer, having previously served as President of the Asia-Pacific region. Mohan, who joined Snap in 2023, was formerly Vice President and Managing Director of India at Meta.
With strong user growth, increasing ad revenue, and expanding premium services, Snap remains focused on strategic investments for long-term profitability while continuing to adapt to shifting market conditions.
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