Snapchat gained 16 million daily users to hit an average of 265 million in the fourth quarter of 2020. Snap beat revenue and adjusted earnings estimates for the quarter, but its Q1 guidance was lower than Wall Street anticipated.
Snapchat’s daily active users were 265 million in Q4 2020, an increase of 47 million, or 22%, year-over-year.
Revenue in the quarter increased 62%, to $911 million, while it narrowed its net loss to $113 million compared with $241 million in the prior-year period. Adjusted earnings per share were 9 cents. Wall Street analyst consensus estimates had pegged Snap’s Q4 revenue coming in at $857.4 million and adjusted EPS of 7 cents, according to Refinitiv.
Snap shares fell more than 5% in after-hours trading Thursday, after the company forecast Q1 revenue to be between $720 million and $740 million, lower than analyst forecasts and representing a sequential decline.
“We’re grateful for the opportunity to serve our community and partners through this challenging period of time,” Evan Spiegel, Snap’s CEO said in announcing the earnings. “Our team has worked tirelessly to help people stay close with their friends and family even while they are physically apart, and we’re proud of the strong results we delivered for our advertising partners this quarter and over the full year.”
Snap delivered its first full year of adjusted EBITDA profitability, Spiegel noted, adding that “as we look towards the future, we’re excited to build on our investments in augmented reality, mapping, and content to drive our ongoing growth.”
On average, Snapchatters opened Snapchat 30 times every day in Q4 2020 and over 90% of the U.S. Gen Z population watched shows and publisher content in the app in the quarter, according to the company.
Total daily time spent by Snapchatters over the age of 35 engaging with Shows and publisher content
On the content front, Snap is looking to grow Spotlight, its recently launched user-generated content feature that presents videos in a personalized, TikTok-like feed. Snapchatters who contribute to Spotlight are eligible to get a cut of more than $1 million daily.
Snap said that Spotlight has grown to over 100 million monthly active users in January 2021.