Snapchat – Despite growing user numbers, Snapchat’s current quarter forecast disappoints the market.
Gen Z’s favorite social network is reportedly struggling to find cash. While its losses rose to $249 million in the second quarter—down from $377 million a year earlier—its results for the current period are less encouraging. As of August 1, Snap Group was down more than 17% in after-hours trading on the New York Stock Exchange.
Yet it’s not for lack of popularity: 432 million users use the ghost app daily, and 850 million use it at least once a month.
Figures beyond expectations, but which do not convince advertisers and advertisers: “Snap does not seem to be able to maintain the favor of investors for long,” notes Jasmine Enberg, from the market research company Emarketer.
A constant for the Snap group, which, since its creation in 2011, has never managed to generate an annual profit via advertising, unlike Meta (Facebook, Instagram, WhatsApp).
Snapchat Advertisers’ disinterest
Yet Snapchat has recently made some conclusive choices. Its Snapchat + offering, a paid subscription adding AI functions , has gained 4 million subscribers since the end of 2023, to rise to 11 million in total.
But Jasmine Enberg notes a glaring lack of interest from advertisers: “Despite strong growth in the number of Snapchat + subscribers, investors have not been satisfied with the weaker growth in its core business, advertising, particularly given the impressive growth in the number of active advertisers.”
Nothing very reassuring for the group, which has been chaining layoffs left, right and centre for two years: in February, the group dismissed 10% of its employees (around 500 people). It had already dismissed 20% of its staff in the summer of 2022, or more than 1,200 people. It seems that the company is increasingly resembling the little ghost that has become its emblem.
