Snap Inc. reported strong growth in its revenue and user base during its Q4 2021 earnings report. Total revenue for 2021 was $4.1 billion, which was good for a 64% year-over-year growth rate, the highest rate of annual revenue growth in company history.
But Meta is kind of like your rundown neighbor’s house dragging down home values. Snap’s stock dipped yesterday after Meta’s earnings and remained down 14% even after the earnings.
That was in spite of 42% growth in Snap’s revenue for Q4, totaling $1.3 billion.
While Meta just reported its first decline in usage, Snap is still on the upswing. It grew its base of daily active users to 319 million in Q4. The company reported it had added 13 million daily users in Q4, and it added 54 million daily users over the full year. This reportedly represents five consecutive quarters of at least 20% community growth year-over-year.
Rebounding after ATT
The strength of Snap’s Q4 business came in large part due to the company’s efforts to rebound from the impacts Apple’s App Tracking Transparency (ATT) policy had on its partnerships with direct-response (DR) advertisers. ATT removed many of the tools Snap had at its disposal for offering advertising partners reliable conversion metrics, which hurt its business with DR clients.
To counter this, Snap is arming itself with measurement that focuses on mid-funnel goals like clicks or installations. Snap pointed to Advanced Conversions, its first-party measurement solution, as being instrumental to its reorientation around measuring for mid-funnel metrics.
Snap also touted its renewed first-party measurement approach as being a positive change for protecting user data and offering advertiser partners a more accurate assessment on their ROI.
For its ad business going forward, Snap identified three priorities for continued growth. The first was continued development of the company’s ad optimization and measurement offerings. The second was investing in sales and marketing through continued training and expansion of its sales and marketing teams. The third was building ad offerings for video and augmented reality.
Snap’s version of the metaverse is AR. The company was bullish about the strength of its current AR offerings and the potential for future growth. Continued innovation in AR will be instrumental to remaining competitive with other big tech platforms, Snap said.
“We believe [innovation is] the only way to compete long term in the tech industry. And we're very excited about the future of augmented reality, [which is] where we're investing a lot of our time, and that's really where a lot of our growth over the longer term is unconstrained in terms of our innovation,” said Snap CEO Evan Spiegel.
Currently, Snap claims 200 million users engage with its AR offerings every day (out of its 319 million daily active users). And here’s an enticing stat to end on: AR Lenses are used an average of six billion times per day.