Snap's direct revenue hits $1 billion annualized run rate as subscribers top 25 million
Snapchat logo is seen in this illustration taken July 28, 2022. REUTERS/Dado Ruvic/Illustration
Feb 18 : Snap said on Wednesday its direct-revenue business has reached $1 billion in annualized revenue run rate, driven by growth in its Snapchat+ subscription service, as the social media company pushes into new income streams beyond advertising.
The company, whose direct-revenue portfolio spans Snapchat+, the Memories photo and video archive tool and in-app purchases, said its total subscriber count has surpassed 25 million.
Squeezed by dominant platforms such as TikTok and Meta-owned Instagram in a crowded social media market, Snap is turning to subscriber growth to boost revenue, particularly as some major clients scale back advertising on smaller services. Ad sales constitute a majority of the company's revenue.
CEO Evan Spiegel had said last year Snap was in a "crucible moment" after its quarterly revenue growth slowed and outlined his ambition to make direct revenue "a durable multi-billion-dollar growth driver for Snap."
The company said on Tuesday it would launch a subscription feature allowing creators to generate recurring income directly from their most loyal fans, beginning with a February 23 test involving a small cohort of Snapchat creators in the U.S.
Snapchat+, launched in 2022, offers customization features, including pinning best friends, custom chat wallpapers and AI-powered pet avatars Bitmoji Pets, to enhance user engagement and retention.
The company has said its total active advertisers on the platform rose 28 per cent in the fourth quarter.
Daily active users of Snapchat rose 5 per cent to 474 million during the quarter, but they fell by 3 million from the prior three-month period, the company said earlier this month.
Last month, Snap unveiled Specs, an independent subsidiary for its augmented reality smart glasses, in a bid to challenge Meta in the fast-growing wearables market.
