Snap Inc.’s stocks have taken a hit this year, experiencing a significant contraction of nearly 50%. Despite this, CEO Evan Spiegel has urged his staff to remain optimistic. He cited the company’s potential for annual revenue growth and ongoing focus on augmenting reality as reasons to keep going strong.
Spiegel concedes that the company’s stock performance has been underwhelming compared to its progress in the past year. He recognizes that the underperformance did not meet expectations but maintains a hopeful stance for future endeavors.
One primary competition for Snap is Instagram, owned by Meta Platforms Inc., and TikTok, owned by ByteDance Ltd. These platforms, particularly popular among younger demographics, have a substantially larger advertisement foundation. Despite challenges, Snap continues to innovate.
To try and increase user engagement, Snap is currently focusing on ‘direct response’ advertisements.
Snap’s resilience amid stock setbacks
This approach has proven effective. During the second quarter after a noticeable sales dip in 2023, the company saw a 16% rise in primary response revenue.
In an innovative move, Snap is now testing advertisement formats that will be displayed in chat inboxes and their map function. The approach is a first for these parts of the application, with the map function in particular allowing users to track their friends’ locations in real-time.
The company’s revenue projection for the current year stands at a robust $5.35 billion, marking a 16% growth compared to the previous year. Significant benefits from this revenue are planned to be reinvested in augmented reality technologies and smart glasses development.
Although Snap was a latecomer in the digital advertising space, Spiegel claims that the company is ahead in the market with their augmented reality platform and smart glasses. Yet, the first pair of smart glasses, the ‘Spectacles’, didn’t sell as expected. This has not deterred the company, as they plan to release a new pair of AR-enabled smart glasses soon.
