Why Europe Must End Its 30-Year Digital Winter to Ensure Its Long-Run Future

Report: Snapchat Expected to Surpass User Base Expectations

Snap, Snapchat, earnings

Snapchat’s parent company, Snap, saw an increase in its shares after a report said the social media platform is expected to surpass Wall Street expectations for its user base.

Snap is projected to have over 475 million daily active users (DAUs) by 2024, exceeding a Visible Alpha estimate of 447 million, Reuters reported Monday (Oct. 16), citing The Verge.

The numbers come as good news for Snap, which has been facing tough competition and a weak advertising market, according to the report. The company has been struggling to maintain its position in the social media landscape, particularly with the rise of platforms like TikTok.

In addition to the user growth, Snap also expects its advertising revenue to increase by more than 20% in 2024, surpassing Wall Street estimates of 14% growth, the report said.

The stock market reacted positively to the news, with Snap shares jumping 11%. An analyst said in the report that expectations for Snap’s stock were previously low, but if the company reaches the projected user and advertising revenue growth, its stock value could increase as a result.

Snap was the first social media firm relying on ads to experience a downturn in demand, according to the report. The company suffered an 80% loss in value last year following macroeconomic issues and more competition. However, Snap also increased the amount of time its daily users spend on the app by at least 10%.

The success of Snap’s paid serviceSnapchat+, is also contributing to the company’s positive momentum.

Snapchat+ exceeded 5 million subscribers in September, up from 3 million in April. The paid subscription service offers exclusive features such as an artificial intelligence (AI)-generated selfie maker, custom wallpapers for chats, and access to the company’s AI chatbot.

Snapchat+ has the potential to generate an estimated $240 million in annual revenue, with 5 million subscribers paying a $3.99 monthly fee.

As Snap continues to grow its user base and generate revenue through Snapchat+, it sets an example for other social media companies. Among rival platforms considering this route is X, formerly known as Twitter, which is considering rolling out three paid tiers for users.