After all these years of existence, Snapchat has finally generated the first quarterly profits of its history. Enough to panic the counters on Wall Street. The results revealed by the social network management totally exceeded investors’ expectations. Snapchat recorded $22.5 million in net profit in the fourth quarter of 2021. A first.
A first quarterly profit of 22.5 million dollars for Snapchat
Snapchat’s price yo-yoed on Wall Street this week. The social network first suffered a 23% drop Thursday, in the wake of Facebook and the announcement of a loss of 4 million users between September and December 2021 for Mark Zuckerberg’s group. The next day, when Snapchat’s results were announced, the stock recovered almost 60%. More than ten years after its debut, the company led by Evan Spiegel has recorded the first quarterly profit in its history: $22.5 million.
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During the fourth quarter of 2021, the social network recorded a turnover of 1.3 billion dollars (an increase of 42% over one year). Nobody expected it. Not even the analysts, who rather expected 1.2 billion. The markets had anticipated the announcement of the results. They expected yet another loss. Ultimately no. 2022 is off to a strong start for Snapchat. Unlike Facebook, the little ghost continued to garner new users. The Californian firm now has 319 million monthly active users (a 20% increase compared to last year).
The little ghost may have finally found the right formula
Snapchat has therefore probably found the right formula both to resist TikTok, but also to generate its first income. Average revenue per user even surpassed the 4 dollar mark between October and December (an increase of 18% compared to the same period in 2020). For Derek Andersen, Snap’s CFO, “The industry has adapted faster than we anticipated. We faced new challenges in 2021, but we delivered solid results”.
Despite everything, with 63 billion dollars in market capitalization, the social network remains far from its historic peak reached in September: 131 billion. After ending 2021 with a bang, Snap is confident for the future. Regarding the number of users, the American company plans growth of between 17% and 18% for the year 2022. Snapchat hopes to reach 330 million users before the end of the year.