Snap Reports Q4 2023 Earnings: Revenue Misses Estimates, Stock Plunges

Social media platform Snap reported its fourth-quarter adjusted profit, which exceeded expectations, but fell short on revenue, causing a significant drop in the company’s stock. Despite adding 8 million daily active users in the December quarter, surpassing estimates, Snap is facing tough competition from Meta Platforms, TikTok, and Alphabet‘s YouTube short-form video services.

In the fourth quarter, Snap’s revenue rose by 5% to $1.36 billion, missing the estimated $1.38 billion. This follows a 5% increase in September-quarter revenue after experiencing a decline in the first two quarters of 2023.

Adjusted earnings per share came in at 8 cents, higher than the 14 cents reported in the year-earlier period. However, Snap’s revenue guidance for the current March quarter fell short, projecting a range of $1.095 billion to $1.135 billion, compared to the estimated $1.12 billion. Snap currently has 414 million active daily users, a 10% increase from the previous year.

The company’s subscription service, Snapchat+, has gained traction with 7 million subscribers as of December 2023. In an effort to restructure, Snap plans to cut 10% of its workforce in 2024, reducing its headcount from roughly 5,300 employees as of Q3 last year.

This downturn in Snap’s financial performance and stock price prompted worries about its future prospects among investors. However, it remains to be seen whether the company can recover in light of the fierce competition it faces in the social media landscape.