Key takeaways from Snapchat Q1 2023 revenue report

Snapchat Q1 report for 2023 highlights the revenue generated and the new developments at Snapchat in augmented reality to expand its community.

Snap Inc has released the Quarter One (Q1) Snapchat earnings report for the year 2023 that highlighted its increase in daily active users, the new content offered to build the community, the efforts to build sustainable profits and more.

Evan Spiegel, CEO, Snap Inc, states, "Our community continues to grow, reaching 383 Mn daily active users in Q1, and we are working to deepen engagement with our content platform while building innovative new features and services like My AI. We are working to accelerate our revenue growth and we are using this opportunity to make significant improvements to our advertising platform to help drive increased return on investment for our advertising partners."

Financial Summary

• Revenue was $989 Mn, compared to$1,063 Mn in the prior year
• Net loss was $329 Mn, compared to$360 Mn in the prior year
• Adjusted EBITDA was $1 Mn, compared to$64 Mn in the prior year
• Operating cash flow was $151 Mn, compared to$127 Mn in the prior year
• Free Cash Flow was $103 Mn, compared to$106 Mn in the prior year

Key Highlights

• DAUs were 383 Mn in Q1 2023, an increase of 51 Mn, or 15% year-over-year.
• DAUs increased sequentially and year-over-year in each of North America, Europe, and Rest of World.
• Total time spent watching Spotlight content grew more than 170% year-over-year, and Spotlight reached more than 350 Mn monthly active users on average in Q1, representing an increase of 46% year-over-year.
• Snapchat launched My AI, a new AI-powered chatbot to make conversational artificial intelligence useful and enjoyable for our community, and surface the best of Snapchat to our community, including relevant AR Lenses and recommendations from the Snap Map.
• 3D was introduced to the Snap Map to highlight Places and make the Map more personal, fun, and engaging.
• New Content Controls feature in Family Center were launched, that allows parents to filter the types of content their teens can watch on Snapchat.
• Safeguards to My AI were announced, including a new age signal and time out functionality.
• Two new Sounds creative tools were rolled out to make it easier to discover and share music — Sounds Recommendations for Lenses and Sounds Sync for Camera Roll.

Advertising, AI & AR Hihghlights

Ads Manager was simplified to create workflows, improved ad management experiences on mobile, redesigned the creative library and simplified payments onboarding experiences.

Snapchat transitioned to a new ad format for Snapchatters that aligned ad design with content design, which is an important input toward a consistent and unified content and advertising interaction experience across Spotlight and Stories.

Snapchat+, the subscription service that offers exclusive, experimental, and pre-release features, reached over 3 Mn paying subscribers in Q1.

Generative AI Backgrounds was rolled out, an exclusive Snapchat+ feature that allows Snapchatters to generate fun backgrounds for their profiles using free-form text prompts.

Snapchat launched AR Enterprise Services (ARES), our new SaaS business, bringing our world-class AR technology suite beyond Snapchat, and into customers’ owned-and-operated apps and websites; early customers include Goodr, Princess Polly, and Gobi Cashmere.