Q3 2024 Summary
Published Feb 18, 2025, 5:23 PM UTCInitial Price$16.43July 1, 2024
Final Price$10.42October 1, 2024
Price Change$-6.01
% Change-36.58%
- Snap is making significant progress in its Direct Response advertising business, with total active advertisers more than doubling year-over-year in Q3. The company's focus on innovating advertising products, investing in machine learning, and enhancing onboarding and integration tools is helping to rapidly expand its SMB customer base.
- The introduction of Simple Snapchat is expected to enhance user engagement, particularly among new and less engaged users, leading to increased content engagement. This increased engagement is anticipated to create more opportunities for advertising partners over the long term, potentially driving higher advertising revenue.
- New ad placements like Sponsored Snaps and Promoted Places are expected to provide incremental reach to advertising partners and contribute to future revenue growth. Early feedback from advertisers has been positive, with businesses focusing on driving more people into their retail locations and strengthening customer relationships.
- The rollout of Simple Snapchat presents significant risks of near-term disruption to Snap's monetization and revenue growth, as management is still uncertain about the potential impacts on advertising inventory and revenue. Evan Spiegel acknowledged they are "still early in understanding the monetization dynamics" and that "changes at scale have the potential to be disruptive". ,
- Brand-oriented advertising revenue was down 1% year-over-year, and management does not anticipate a significant recovery in Q4, with upper funnel advertising from large enterprise clients underperforming. This continuous weakness in brand advertising poses a challenge to revenue growth.
- Snap is making high levels of investment in new initiatives like Spectacles and augmented reality with uncertain timing and return. The focus on building a developer ecosystem before consumer adoption indicates that these investments may not translate into revenue in the near term, potentially impacting profitability and cash flow.