With the photo app Snapchat, the years of restructuring of the advertising systems are finally paying off. The operating company Snap’s sales rose by 21 percent year-on-year to almost 1.19 billion US dollars (1.11 billion euros) in the last quarter. Investors are relieved: the stock jumped a quarter in after-hours trading on Thursday. Three months ago, the price collapsed by more than 30 percent after disappointment with the previous quarterly figures.
Snap had once accustomed investors to growth rates of more than 50 percent. But then the growth stopped, partly because of Apple’s measures to increase privacy on the iPhone. Developers like Snap now have to explicitly ask users for permission if they want to track their behavior across different apps and services in order to personalize advertising. Many users refused – and that destroyed numerous advertising models, including those of Facebook’s Meta group.
In contrast to Meta, Snap boss Evan Spiegel supported the Apple changes. However, the Snapchat company struggled for a long time to set up new, efficient processes for online advertising and to grow sales significantly again.
At the same time, Snap remains in the red. In the last quarter there was a loss of 305 million dollars (284 million euros) after being in the red of 328.7 million dollars a year ago. Snap boss Spiegel has already taken austerity measures to counteract this.
The number of daily active users rose from 414 to 422 million within three months. Snapchat once became popular with pictures that disappear on their own. The service now also relies, among other things, on so-called augmented reality (AR), in which digital objects are integrated into real environments. For example, fashion companies use the technology to let people try on their products virtually on Snapchat.
For the current quarter, Snap forecast sales of between $1.225 and $1.255 billion, hitting analysts’ estimates at the lower end of the range.
