Snap CEO Evan Spiegel expressed confidence the company will soon turn a profit, after it narrowed its net loss and generated record revenue in the final quarter of 2018.
A loss of $158 million in Q4 2018 was down from $350 million in the comparable 2017 quarter. Revenue increased 36 per cent year-on-year to $390 million.
In an earnings call, Spiegel said Snap had “focused on building a foundation…to scale over the long-term by driving sustainable product innovation, scaling our advertising platform and hiring the leadership team that will help us achieve our future goals”.
While the company has not turned a profit since going public in 2017, Spiegel added the Q4 performance placed it “substantially closer to achieving profitability”.
Daily active users (DAUs) during the quarter of 186 million were down from 187 million in Q4 2017, but flat compared with Q3 2018, indicating the company halted reductions recorded earlier in the year. Snap predicted DAUs would remain stable in the current quarter.
Spiegel explained the record revenue in Q4 was aided by income from Commercials, “a premium non‐skippable video advertising format” which helped Snap “more than double the advertising revenue that we generated from premium content” year-on-year.
In an earnings statement, Snap also highlighted features including Snapchat “video experiences” as having yielded “positive results” in the recent quarter.
Commenting on a spate of executive departures during 2018, Speigel said: “We focused on building the leadership team we need in order to execute against our long‐term opportunity, and recently welcomed several talented and experienced leaders for the next stage of our company’s growth”.
Last week Reuters reported Snap is considering some changes to Snapchat as part of a strategy to work with news discovery platforms.Subscribe to our daily newsletter