Snapchat Reports Positive Q3 2023 Financial Results and Focuses on Ad Platform Enhancements

Snapchat has announced its financial results for the third quarter of 2023 and has been promoting improvements on its advertising platform.

The company reported revenues of $1.19 billion for the third quarter, a 5% increase, but incurred a net loss of $368 million.

During this period, the platform gained nine million daily users, increasing the total number of daily active users to 406 million, marking a 12% rise from the previous year.

Evan Spiegel, the CEO, stated in a press release, “Our revenues have returned to positive growth in the third quarter, with a 5% annual increase. We are focused on enhancing our advertising platform to achieve higher returns on investment for our advertising partners. We have also developed our efforts to provide superior service to our partners and ensure the success of our customers.”

The company informed investors that they anticipate revenues in the fourth quarter to range between $1.32 billion and $1.375 billion, indicating expected yearly revenue growth of approximately 2% to 6%. The company partially attributed the decline in advertising demand in the last quarter of the year to the events in the Middle East, explaining, “We have noticed a temporary pause in spending from a large number of brand advertising campaigns after the events in the Middle East. Given the unpredictable nature of these events, we believe it’s challenging to provide official guidance for the fourth quarter.”

In the third quarter, Snapchat implemented over 17 key improvements to enhance machine learning for applications, the web, and dynamic product advertising platforms.

Moreover, the subscription service within the app, +Snapchat, which costs $4 per month, gained an additional five million subscribers during this quarter. This figure indicates an annual run rate of over $240 million. +Snapchat is an integral part of the company’s strategy to diversify its non-advertising revenue sources.

In addition, over 200 million people sent more than 20 billion messages via My AI, the artificial intelligence chatbot introduced by Snapchat in April 2023, which is available for free to all users. The company highlighted that these numbers make My AI one of the most popular chatbots available today.

This achievement comes shortly after the company downsized around 20% of its workforce over a year ago in an effort to reduce costs amid a slowdown in advertising revenues. It is evident that these cost-cutting measures and new features have started to bear fruit.