Snapchat now has more than 900 million monthly active users, and more than 460 million daily active users, as the social platform continues to grow year over year.
In its Q1 earnings report, Snap Inc. reported revenue of $1.36 billion, up 14 percent from a year earlier, and a net loss of $140 million, a significant improvement from a year earlier when the company lost $333 million in Q1.
The growth is driven in part by a shift in the company’s approach to advertising, where it has been trying to shift the mix of brand advertising and direct response advertising. Advertising revenue grew by 9 percent to $1.2 billion, with direct response ads improving by 14 percent year over year, compared to brand ads, which declined by 3 percent.
That said, the company also signaled to Wall Street that there are warning signs about a weakening economy, and as is typical, the advertising market is the canary in the coal mine.
“Given the uncertainty with respect to how macro economic conditions may evolve in the months ahead, and how this may impact advertising demand more broadly, we do not intend to share formal financial guidance for Q2,” the company wrote in its investor letter. “While our topline revenue has continued to grow, we have experienced headwinds to start the current quarter, and we believe it is prudent to continue to balance our level of investment with realized revenue growth.”
“While there is uncertainty regarding the macro operating environment, we remain optimistic about the long term prospects for our business,” the company continued. “We remain optimistic because of the progress we have made with our ad platform to improve performance for our advertising partners, because of the progress we have made to diversify our advertiser base as well as our revenue sources with the growth of Snapchat+, because of our demonstrated ability to prioritize our cost structure to balance investment with topline growth over time, and because we have built a strong balance sheet with the financial flexibility necessary to maintain strategic focus through volatile macro conditions.”
More to come.