USA: 2022 Snap Inc. presented many difficulties. Now that the business has released its most recent earnings report, it appears that little has changed in the final three months of the year.
The growth in the platform's user base was the main selling point of the report. But the company's ongoing revenue and profitability problems appear to be here to stay.
Snap's Achilles heel is finding ways to monetize its growing user base. Businesses are working to diversify their sources of income to reduce their reliance on online advertising. However, its efforts have not yet yielded results.
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The reduction in advertising spending as a result of the ongoing economic turmoil makes Snap's position even more challenging. Snap's numbers are, if anything, a warning.
Snap's daily active users (DAUs) grew by 12 million during the final quarter of 2022, bringing the total to 375 million. Unlike the US, where the user base was flat, Europe saw modest growth.
The number of Snapchat users exploded in other countries, especially India. DAUs increased by 17%, or 56 million, over the fourth quarter of 2017.
The company's paid platform Snapchat+ added two million new subscribers in the most recent quarter. Snapchat+, which debuted in June 2022, has features such as the ability to design custom app icons.
A story replay indicator, and the ability to see where friends have moved. It launches in India in August 2022 and is priced between Rs. 49 per month (60 cents).
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In the previous year's fourth quarter, Snap reported revenue of $1.3 billion, a slight increase from $1.298 billion. The business' annual revenue rose 12% to $4.6 billion.
Net loss in the most recent quarter was $288 million, compared to $23 million a year ago. Additionally, the annual net deficit is set to increase from $488 million in 2021 to $1.43 billion in 2022.
Snap reported its fourth consecutive quarter of net loss in the fourth quarter of 2022. There is also a lack of confidence among investors due to stagnant revenues.
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If it continues to be bad then according to the company the current quarter could be worse. According to Snapchat's parent company, the company's revenue will decrease by 2% to 10% in the first quarter of 2023.