Snap Inc Q3 results shows revenue increase of 6% YoY to $1.8bn

Snap Inc. today posted financial results for the quarter that ended 30 September 2022, showing revenue increased 6% to US$1.128 billion (A$1.797 million), compared to the prior year, and a net loss of $360 million, including restructuring charges of US$155 million (A$183 million), compared to US$72 million (A$114 million) in the prior year.

Snap Inc CEO, Evan Speigel, said: “This quarter we took action to further focus our business on our three strategic priorities: growing our community and deepening their engagement with our products, reaccelerating and diversifying our revenue growth, and investing in augmented reality.

“The growth of our community to 363 million daily active users, an increase of 19% year-on-year, continues to expand our long-term opportunity as we navigate this volatile macroeconomic environment.”

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“We expect that the operating environment will continue to be challenging in the months ahead,” the company said in a statement.

However, Snap said its Daily Active Users (DAUs) were 363 million in Q3 2022, an increase of 57 million, or 19% year-on-year. Total time spent watching Spotlight content grew 55% year-on-year. Daily average time spent for Snapchatters 35 and older watching shows and publisher content increased by more than 40% year-on-year.

Adjusted EBITDA was US$73 million (A$116 million), compared to US$174 million (A$277 million) in the prior year. Operating cash flow was $56 million (A$89 million), compared to $72 million (A$114 million) in the prior year. Free Cash Flow was US$18 million (A$28 million), compared to US$52 million (A$82 million) in the prior year.

Given uncertainties related to the operating environment, Snap said it was not providing its expectations for revenue or adjusted EBITDA for the fourth quarter of 2022.

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Snapchat+, its subscription service for exclusive, experimental, and pre-release features reached over 1.5 million paying subscribers in Q3 and is now offered in over 170 countries.

The company has made significant strides in the expansion and testing of its AR creation suite and has now onboarded over 15 new beta partners who are already designing Shopping Lenses created with its AR Image technology.

Snap Inc. also announced today its board of directors had authorised a stock repurchase program of up to $500 million of its Class A common stock. The goal of the program is to utilise the company’s strong balance sheet to opportunistically offset a portion of the dilution related to the issuance of restricted stock units to employees as part of the overall compensation program designed to foster an ownership culture.

Repurchases under this program will be funded from existing cash and cash equivalents. As of September 30, 2022, Snap had $4.4 billion in cash, cash equivalents, and marketable securities.

In Q3 2022, Snap Inc. traded at US$10.79 (AU$17.18) as of 21 October 2022, with a market capitalisation of US$17.79 billion (AU$28.32 billion).


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