Snap Adds Millions of New Users, Shares Sink Despite Revenue Gains

Sam Blake

Sam primarily covers entertainment and media for dot.LA. Previously he was Marjorie Deane Fellow at The Economist, where he wrote for the business and finance sections of the print edition. He has also worked at the XPRIZE Foundation, U.S. Government Accountability Office, KCRW, and MLB Advanced Media (now Disney Streaming Services). He holds an MBA from UCLA Anderson, an MPP from UCLA Luskin and a BA in History from University of Michigan. Email him at samblake@dot.LA and find him on Twitter @hisamblake

Snap Adds Millions of New Users, Shares Sink Despite Revenue Gains

Snap added millions of new users last quarter — its largest increase in years — beating Wall Street expectations of growth and revenue.

Riding a wave of increased digital ad-spending and the pandemic's ongoing limitation of leisure activities, Snap added 16 million users and pulled in $911 million in revenue in the fourth quarter of 2020.


Despite the growth, share prices plummeted as much as 11% in after-hours trading on a lower-than-expected profit forecast for the first quarter of 2021. Analysts had expected a first-quarter profit projection of around $19 million, but Snap reported an anticipated EBITDA loss of between $50 million and $70 million.

Explaining the underwhelming forecast, Snap Chief Financial Officer Derek Anderson pointed to temporary advertising pauses in the first two weeks of January following the U.S. Capitol riot and uncertainty stemming from Apple's upcoming iOS privacy rule-changes, which are slated to take effect late in the first quarter and could depress ad spending. But, he pointed out that the number of advertisers on Snapchat doubled in the fourth quarter over the previous year and that a continuation of recent momentum could change the first-quarter outlook.

Over 90% of the U.S. Gen Z population watched Snap's curated content in the fourth quarter, the company said, and more than 200 million users engage with Snap's AR every day on average.

Snap's global daily active users climbed to 265 million, its largest increase since the second quarter of 2016. That beat consensus Wall Street expectations by about 7 million. Overall revenues of $911 million also beat analyst forecasts of around $856 million.

Meanwhile, the company made $3.44 per user globally, which lags competitor Facebook by nearly $7. That gap has given analysts reason to believe that Snap has plenty of room to further monetize its user base.

Snap has said it offers advertisers innovative opportunities to reach a coveted younger demographic via its AR "lens" technology and Discovery content platform. The company has recently partnered with brands like Gucci and Champs Sports to enable "virtual try-ons" as retailers increasingly look to tech to adapt to the post-pandemic world.

"We've seen a lot of acceleration in demand for AR advertising and it's a trend we don't see going backwards," said Chief Business Officer Jeremi Gorman, pointing to Snap's plans to invest "heavily" in making it easier for advertisers to build lenses via Snap's lens studio.

In addition to AR and content, Snap has also been ramping up its gaming division, which could provide further revenue expansion through both advertising and in-app purchases. It continues to look to its Maps feature as a future moneymaker as well. Noting that they are used by 200 million users, CEO Evan Spiegel said Maps offers a "substantial revenue opportunity" from small- and medium-sized local businesses, particularly once the pandemic subsides.

Entering Thursday, Snap's share price had climbed 260% over the previous year.

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Los Angeles’ Wage Growth Outpaced Inflation. Here’s What That Means for Tech Jobs

Samson Amore

Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College and previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.

Los Angeles’ Wage Growth Outpaced Inflation. Here’s What That Means for Tech Jobs

Inflation hit cities with tech-heavy workforces hard last year. Tech workers fortunate enough to avoid layoffs still found themselves confronting rising costs with little change in their pay.

Those national trends certainly touched down in Los Angeles, but new data from the Bureau of Labor Statistics (BLS) show that the city of angels was the only major metro area that saw its wage growth grow by nearly 6% while also outpacing the consumer price index, which was around 5%. Basically, LA was the only area where adjusted pay actually came out on a net positive.

So, what does this mean for tech workers in LA County?

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samsonamore@dot.la

Energy Shares Gears Up To Bring Equity Crowdfunding to Retail Investors

David Shultz

David Shultz reports on clean technology and electric vehicles, among other industries, for dot.LA. His writing has appeared in The Atlantic, Outside, Nautilus and many other publications.

Energy Shares Gears Up To Bring Equity Crowdfunding to Retail Investors
Photo by Red Zeppelin on Unsplash

The Inflation Reduction Act contains almost $400 billion in funding for clean energy initiatives. There’s $250 billion for energy projects. $23 billion for transportation and EVs. $46 billion for environment. $21 billion for agriculture, and so on. With so much cash flowing into the sector, the possibilities for investment and growth are gigantic.

These investment opportunities, however, have typically been inaccessible for everyday retail investors until much later in a company’s development–after an IPO, usually. Meaning that the best returns are likely to be captured by banks and other institutions who have the capital and financing to invest large sums of money earlier in the process.

That’s where Pasadena-based Energy Shares comes in. The company wants to help democratize access to these investment opportunities and simultaneously give early-stage utility-scale energy projects another revenue stream.

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How These Ukranian Entrepreneurs Relocated Their Startups to LA and Found Success

Aisha Counts
Aisha Counts is a business reporter covering the technology industry. She has written extensively about tech giants, emerging technologies, startups and venture capital. Before becoming a journalist she spent several years as a management consultant at Ernst & Young.
How These Ukranian Entrepreneurs Relocated Their Startups to LA and Found Success
Joey Mota

Fleeing war and chasing new opportunities, more than a dozen Ukrainian entrepreneurs have landed in Los Angeles, finding an unexpected community in the city of dreams. These entrepreneurs have started companies that are collectively worth more than $300 million, in industries ranging from electric vehicle charging stations to audience monetization platforms to social networks.

Dot.LA spent an evening with this group of Ukrainian citizens, learning what it was like to build startups in Ukraine, to cope with the unimaginable fear of fleeing war, and to garner the resilience to rebuild.

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