Snap’s Fourth Quarter Revenue Was the Company’s Slowest Growth Since Its IPO Six Years Ago

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 and find him on Twitter @Samsonamore.

​Snap logo over a bunch of snap shots
Sebastian Miño-Bucheli

Snap Inc.’s trend of growing its user base but failing to adequately monetize them continues.

The company reported its fourth quarter and 2022 annual earnings Jan. 31, and almost immediately, the market reacted negatively to news that after 12 years of operations, Snap still hasn’t found a way to achieve profitability with its camera app.

Snap’s been steadily growing its daily active user base the entire past fiscal year. In fact, it posted positive user growth every quarter in 2022, on average adding about 18% more users each quarter. Snap ended the year with 375 million users, another 18% increase annually.

But the trouble for Snap – and beleaguered CEO Evan Spiegel – is finding a way to squeeze enough money out of these users to keep the company afloat. At this point, just having a growing user base isn’t enough, and profitability seems more like a pipe dream each quarter that Snap reports it’s failed to monetize its loyal demographic.

Snap ended the 2022 fiscal year with revenue up 12% to $4.6 billion, but its net loss skyrocketed. Its fourth quarter revenue didn’t move much from last year, either – in Q4 Snap’s sales were a paltry $1.3 billion, a figure Wall Street analysts expected but the lowest growth figure for Snap ever since it went public in 2017.

And, Snap continues to hemorrhage money. The company’s net loss in 2022 was $1.4 billion, which included $189 million in “restructuring charges.” That’s a steep increase from the $488 million Snap lost at the end of last year. Snap lost $288 million in the fourth quarter, a major blow considering that in the previous year’s fourth quarter, it managed to break even and post net income of $23 million.

In an earnings release Tuesday, Spiegel said the company “continue[s] to face significant headwinds as we look to accelerate revenue growth, and we are making progress driving improved return on investment for advertisers and innovating to deepen the engagement of our community.”

The company is so pessimistic about its upcoming financial situation that it warned it would not provide expectations for revenue in the upcoming first quarter 2023 because of “uncertainties related to the operating environment.”

One way Snap could begin to wring some money out of its user base is through its new premium offering, Snapchat+, which it launched in June. Snap said the service, which offers around a dozen experimental pre-release app features for $3.99 per month, has 2 million subscribers. But that’s a tiny fraction of its overall user base of 375 million willing to pay for the app.

The company will also look to court more advertisers and retain the ones that are still on board. Snap noted in its report that it’s investing in a partnership with BigCommerce, which should allow “tens of thousands” of companies to advertise more effectively. Spiegel said in a shareholder letter Tuesday that Snap is “also working to deepen engagement with our content platform to expand our overall content monetization opportunity.”

Noticeably absent from this quarterly earnings report was mention of Spiegel’s longtime pet project, wearables. Snap’s ill-fated Spectacles camera glasses or Pixy drones were nowhere to be found. Instead, the focus is now on augmented reality; Snap noted to date people have developed over 3 million AR lenses on the app. The company’s using AR for ads, too – Snap said it ran partnerships with retailers including H&M, Adidas and Walmart that encouraged users to virtually try on their products in the app.

Snap’s stock was hit hard as investors realized the company’s sales were stalled. Its stock was down more than 14%, continuing a trend of its value being erased on the heels of lackluster earnings.

Snap said it will share more information about its operations at its annual investor day, Feb. 16 at 9 a.m. PST.

Subscribe to our newsletter to catch every headline.

Astrolab's New SpaceX-backed Rover Could Change Space Exploration Forever

Lon Harris
Lon Harris is a contributor to dot.LA. His work has also appeared on ScreenJunkies, RottenTomatoes and Inside Streaming.
Astrolab's New SpaceX-backed Rover Could Change Space Exploration Forever
Photo by Samson Amore

This is the web version of dot.LA’s daily newsletter. Sign up to get the latest news on Southern California’s tech, startup and venture capital scene.

Local Los Angeles-area startup Astrolab Inc. has designed a new lunar vehicle called FLEX, short for Flexible Logistics and Exploration Rover. About the size of a Jeep Wrangler, FLEX is designed to move cargo around the surface of the moon on assignment. It’s a bit larger than NASA’s Mars rovers, like Perseverance, but as it’s designed for transport and mobility rather than precision measurement, it can travel much faster, at speeds of up to 15 miles per hour across the lunar surface.

Read moreShow less

Meet the Creator Economy’s Version of LinkedIn

Kristin Snyder

Kristin Snyder is dot.LA's 2022/23 Editorial Fellow. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.

Meet the Creator Economy’s Version of LinkedIn

This is the web version of dot.LA’s daily newsletter. Sign up to get the latest news on Southern California’s tech, startup and venture capital scene.

LinkedIn hasn’t caught on with Gen Z—in fact, 96% rarely use their existing account.

Considering 25% of young people want to be full-time content creators and most influencers aren’t active on LinkedIn, traditional networking sites aren’t likely to meet these needs.

Enter CreatorLand.

Read moreShow less

This Week in ‘Raises’: Total Network Services Gains $9M, Autio Secures $5.9M

Decerry Donato

Decerry Donato is a reporter at dot.LA. Prior to that, she was an editorial fellow at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.

This Week in ‘Raises’: Total Network Services Gains $9M, Autio Secures $5.9M
This Week in ‘Raises’:

It has been a slow week in funding, but a local decentralized computing network managed to land $9 million to accelerate deployment of its new product called Universal Communication Identifier (UCID™). Another local company that secured capital included Kevin Costner’s location-based audio storytelling platform and the funding will go toward expanding the app’s content library and expanding into additional regions in the United States.

Read moreShow less