In this post we discuss the revenue model of Snapchat.
Snapchat, is a camera application that helps people communicate visually with friends and family through short videos and images called Snaps.
The snaps have a limited life-span after which they are automatically deleted.
Apart from sharing snaps, Snapchat’s chat feature helps users interact with friends and family by making voice and video calls or communicate using stickers and emojis or visual stories.
Snapchat Founders & IPO:
Snapchat was founded by Evan Spiegel and Robert Murphy.
The company began its operations in 2010 and completed its Initial Public Offering (IPO) in March 2017. It is listed in the New York Stock Exchange as SNAP INC.
The Snapchat Revenue Model:
Snapchat makes money primarily through in-app advertising.
Snap Ads let advertisers tell their stories, using full screen videos with sound.
Snap Ads also allow advertisers to integrate additional
experiences and actions directly within these ad units, including watching a long-form video, visiting a website, or installing an app.
Snapchat’s revenues have grown substantially over the last 5 years from USD 58.66 Million in 2015 to USD 1715.54 Million in 2019.
However, all this revenue growth has not culminated into operating profits for Snapchat.
Its operating losses mounted from USD 382 Million in 2015 to USD 1103 Million in 2019.
So when do you expect Snapchat to start turning operating profits? Do let us know in the comment section below.
Source – Company 10-K filings.
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