Snap Inc. reported a robust fourth-quarter performance, with revenue climbing 14% year-over-year to $1.56 billion, surpassing analyst expectations. This growth was primarily driven by a strong performance in its advertising segment, which contributed $1.41 billion, marking a 10% increase from the previous year. The company also saw a significant boost in its Snapchat+ subscription service, which grew 131% year-over-year, reaching an annualized revenue run rate of over $500 million. Snap's strategic overhaul of its advertising business and the expansion of its Snap Star program, which incentivizes creators, have been pivotal in driving these results. The company also reported a net income of $9 million, a notable turnaround from a net loss of $248 million in the prior year, attributed to improved adjusted EBITDA and reduced stock-based compensation expenses.
Snap's daily active users reached 453 million in the fourth quarter, a 9% increase year-over-year, with growth primarily coming from regions outside North America and Europe. The company anticipates further growth in the first quarter of 2025, projecting daily active users to reach 459 million. Despite the positive revenue outlook, Snap expects its first-quarter adjusted earnings to be lower than analyst expectations, as it plans to increase investments in hiring, legal costs, and marketing. The company remains optimistic about its growth prospects, highlighting plans to enhance its augmented reality offerings and simplify the Snapchat user experience.
Snap's stock closed at $11.6, up 3.85% from the previous close of $11.17, and continued to rise by 3.88% in after-hours trading, reaching $12.0499.