Snap charts path to one billion monthly users at latest investor day
Snap (SNAP) held its second Investor Day Thursday, just weeks after another brutal earnings report that sent shares tumbling.
CEO Evan Spiegel’s message to investors Thursday focused on monetization, the growth of Snap’s community, the appeal of Snap’s demographic and platform to advertisers, and of course, augmented reality (AR). And a big number – a billion users.
At the company’s headquarters in Santa Monica, California, Snap announced that its monthly active user base grew to 750 million monthly active users (MAUs), a 25% increase from 600 million MAUs 10 months ago.
The company added it sees a way to increase that MAU count to 1 billion in the next few years.
Meanwhile, Snap’s daily active users (DAU) currently stand at around 375 million.
“We have everything we need to build a successful business over the long term, a large and growing community, an innovative and engaging product that is constantly evolving, a strong balance sheet with a track record of positive free cash flow, and a long-term vision for what what we believe will be the most significant advances in computing technology the world has ever seen – augmented reality,” CEO Evan Spiegel told the audience.
On Jan. 31, Snap reported fourth-quarter results that met analyst estimates for revenue and user growth, but showed a net loss and weak guidance for the first quarter.
Snap’s shares fell 4.7% Thursday after Investor Day. Still, shares are up about 20% so far this year. From their all-time high in 2021, shares are down about 85%.
AR is still the long-term plan
Though generative AI has surged in popularity in recent months — and competitor Meta Platforms (META) is aggressively pursuing its own Metaverse-centric vision of the future — Snap co-founder and CEO Evan Spiegel is sticking to his guns.
“Augmented reality has the potential to improve almost everything in our daily lives, whether it’s discovering your neighborhood’s rich history, learning to play the piano, redecorating your living room, or practicing your soccer spiral,” he said.
Snap’s slowing sales growth
Snap’s CFO Derek Andersen highlighted the difficulties in the macroeconomic climate and how it’s affecting Snap’s sales and profits. He acknowledged in the Q&A session that the company needs to increase revenue to fix things, but added that the company is focused on what it can control, not the macro and privacy changes , which have rocked it for the last year and a half.
Last month, Snap was forecasting a current-quarter revenue decline of between 2% and 10% year over year.
“We will continue to focus on the inputs that we can control and hope that the environment will cooperate,” he added.
Looking ahead, Andersen expressed optimism about the company’s direct response ad business and the ability to monetize its AR capabilities.
In the medium term it is planned to use and expand the Snapchat Plus subscription service.
“We want to prioritize the opportunities that we will pursue,” Andersen said. “We want to fully fund these priorities, then it’s just a matter of execution.”
Allie Garfinkle is Senior Tech Reporter at Yahoo Finance. Follow her on Twitter at @agafinks and further LinkedIn.
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