Snap revenue falls for the first time since it went public

Social media platform Snapchat announced how it fared financially in the first quarter of 2023 on April 27. Snap, the parent company of Snapchat, saw its stock tumble by 24 percent as the company missed revenue estimates. Wall Street estimated Snap's revenue for Q1 2023 at $1 billion but the company's revenue stood at $989 million. This is down by 7 percent from $1,063 million which the company racked in Q1 2022. This is the first time that the company has reported a fall in revenue since it went public.

Snap says this slump is a result of decreased demand for ads after introducing upgrades to the platform on which it sells ads.

“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,” Evan Spiegel, CEO, Snap, said in a statement.

However, the company's net loss went down as well. Net loss was $329 million, compared to $360 million in the prior year. Free Cash Flow was $103 million, compared to $106 million in the prior year.

"Our community continues to grow, reaching 383 million 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," said Evan Spiegel, CEO. "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."

In the last quarter, Snap simplified Ads Manager creating workflows, improved ad management experiences on mobile, redesigned the creative library and simplified payments onboarding experiences, the company claims in an official statement.

The company also announced transition to a new ad format for users that aligned ad design with content design