Snap Inc. the parent company of Snapchat has released its Q1 figures for 2025 and while top line figures look OK, its guidance for the rest of the year paints a somewhat glum picture of the economy.
Its revenue climbed 14 per cent year-on-year from just under US$1.2 billion (AU$1.87 billion) to US$1.36 billion (AU$2.14 billion).
Its operating loss narrowed from US$333 million to US$194 million (AU$521 million and AU$303 million, respectively).
Its revenue in the rest of the world—as opposed to North America and Europe—climbed 20 per cent from Q4 2024.
Snap said it reached 460 million daily active users during the quarter, up from 453 million previously. It also said it reached 900 million monthly active users, up from 850 million in August, the last time Snap provided that stat.
The company said its Snapchat+ subscription service reached 15 million subscribers, up from 14 million in the previous quarter. The service rolled out in 2022 and makes up the majority of Snap’s “other revenue.” Revenue for the unit rose 75 per cent from a year ago to US$152 million (AU$238 million).
Those numbers gave CEO Evan Spiegel the confidence to say in a letter to investors:
“Our large, hard-to-reach audience, brand-safe environment, and performant advertising platform have made us a valuable partner for businesses that want to grow and reach the next generation of Snapchatters. Given the progress we have made with our advertising platform, and the pace of execution against our 2025 strategic priorities, we believe we are well positioned to deliver improved business performance and meaningful positive Free Cash Flow as we make further progress towards GAAP profitability.”
However, all of that was tempered in the company’s financial outlook.
“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. 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 realised revenue growth,” Spiegel wrote.
While the main advertising holdcos have reported that the financial challenges the world faces—not least US President Donald Trump’s tariffs—are unlikely to affect them too much, Snap’s admission may be a sign of things to come from the other large tech players.
In fact, Snap’s share price plunged 13 per cent on the back of the announcement due to its decision not to provide financial guidance, despite the improved topline numbers.
Meta will report its earnings on Wednesday (Thursday Australia time) followed by Reddit the next day and Pinterest on 8 May.
