Snapchat doubles paying subscribers year-over-year, beats Q3 expectations

Snap is making a remarkable rebound. The parent company of the Snapchat app exceeded projections by raking in $1.37 billion in quarterly revenue during Q3 2024.

Analysts had predicted that Snap’s quarterly revenue would reach $1.36 billion. The company’s better-than-expected results sent its stock price soaring. According to Barron’s, Snap stock rose by 9.6% during premarket trading in the wake of the Q3 report.

Snap has now enjoyed a string of encouraging financial results. Two quarters ago, it enjoyed an even bigger stock boost, with services like the subscription offering Snapchat+ making significant contributions.

A year ago, Snap’s outlook hardly looked this bright. In July 2023, the tech company braced investors for a rocky future, leading to a stock market plummet. Just a few months later, a round of layoffs hit Snap’s augmented reality (AR) division.

How did Snap recover from that downturn? Step one: Keep it simple. As the company dialed back experiments in some areas, it introduced a “simplified version of Snapchat” that is “organized into three core experiences focused on communicating with friends, using the camera, and watching entertaining content,” as explained in the Q3 investor letter. That shift has delivered promising early results, the letter said.

But there’s more to Snap’s turnaround than mere streamlining. Though the company’s previous layoffs hit adventurous divisions like AR and original content, Snap is now finding new ways to invest in those segments of its business. The fifth generation of its wearable Spectacles is looking to succeed where previous iterations failed, and new features are unlocking fresh creative opportunities for users.

Snapchat+ is working out, too. After soaring past the million subscriber mark shortly after launch, the premium tier has continued to grow. Snapchat+ subscribers have doubled year-over-year to reach 12 million. Snap’s “other revenue” line in its earnings report — which covers products like Snapchat+ and Spectacles — has doubled year-over-year as well.

There only seemed to be one piece of lukewarm news in Snap’s Q3 investor letter. Its projected Q4 revenue is lagging slightly behind analyst projections. A pessimist could argue that Snap needs to accelerate its revenue, but for the optimists, those differing projections present an opportunity for Snap to prove its doubters wrong once again.