Snap Stock Charts: Understanding the Decline in Revenue and ARPU

As one of the most popular social media platforms, Snap's revenue has been declining over the past year, with expectations of a 2% to 10% decrease in the first quarter of 2023. This decline is largely attributed to the company's inability to increase its average revenue per user (ARPU), which has been consistently decreasing.

Despite gaining new daily active users (DAUs) both domestically and internationally, Snap's overseas users generate significantly lower revenue compared to their North American counterparts. The deceleration in DAU growth, ARPU, and quarterly revenue is a concerning trend for the company.

In 2022, Snap's revenue rose 12% to $4.6 billion, with an increase of 17% in total DAUs to 375 million. While this may seem impressive, it pales in comparison to the company's previous growth rates. In 2020, Snap's revenue surged 46%, and in 2021, it rose 64%.

Several factors have contributed to Snap's declining revenue and ARPU. The broader advertising market has cooled off due to inflation and macroeconomic headwinds, causing companies to reduce their spending. Additionally, Apple's privacy update on iOS has limited the growth of targeted ads for Snap.

Snap's investor day in February 2021 saw the company boldly claim that it could grow its annual revenues by about 50% for multiple years. However, this promise remains unfulfilled as the company faces a sobering reality check.

In conclusion, Snap's declining revenue and ARPU are significant concerns for investors. The company must address these issues to regain its growth momentum and maintain its position as a top social media platform.

Snap stock charts