Snapchat: $9M Profit Marks a Stunning Reversal from $248M Loss | 528% Surge in Free Cash Flow

With TikTok’s continuity in the U.S. still being decided, Snapchat capitalises on shifting engagement trends, reporting a financial rebound with surging ad revenue, creator participation, and AI-driven user growth.

Snap Inc. revealed a turnaround in its latest earnings report, reaching net income of $9 million for Q4 2024, a dramatic reversal from the $248 million loss recorded in the same period last year. 

The company also reported a 528% increase in annual Free Cash Flow, moving from $35 million in 2023 to $219 million in 2024.

Snap’s revenue for Q4 grew 14% year-over-year (YoY) to $1.56 billion, driven by strong advertiser performance and increased user engagement. Full-year revenue climbed 16% to $5.36 billion, with Daily Active Users (DAUs) reaching 453 million, a 9% YoY increase.

The company may also be reaping the benefits of the recent issues surrounding TikTok in the U.S. CEO Evan Spiegel acknowledged this during Snap’s earnings call on Tuesday, noting that while the company isn’t drawing definitive conclusions, the situation has had a noticeable impact.

“We’re not trying to draw too many conclusions from some of the engagement lift we saw when [TikTok] went dark for that brief period of time. I would say that the overall environment of uncertainty is benefiting our business,” Spiegel said.

One of Snapchat’s strongest assets in this space is Spotlight, the company’s short-form video platform that competes directly with TikTok. 

With the situation regarding TikTok’s operations in the U.S., creators have been exploring alternative platforms, and Snap has capitalised on this by expanding its Snap Star program, which saw a 40% YoY increase in the number of creators posting content in Q4.

Snapchat public content ecosystem is also thriving. “I think in Q4 we actually reached a billion public posts a month on Snapchat. So the public content ecosystem is growing in a really nice and healthy way, and so we’re just going to continue our focus there when it comes to our strategy and participation,” Spiegel added.

This shift isn’t just benefiting Snap—other platforms like YouTube, Meta, and even the Chinese-owned RedNote have reportedly seen an increase in engagement as TikTok works to settle the uncertainties.

Financial Rebound and Revenue Diversification

Snapchat’s financial performance showed great improvements across the board. The company’s Adjusted EBITDA for Q4 surged 73% to $276 million, up from $159 million in Q4 2023. Full-year Adjusted EBITDA saw an even more dramatic increase, jumping 215% YoY to $509 million.

Operating cash flow for Q4 rose to $231 million, a 40% YoY increase, while Free Cash Flow surged 65% to $182 million.

“Active advertisers more than doubled in Q4, with the improvements we have made to our advertising platform driving improved advertiser performance and helping to grow revenue 14% year-over-year,” Spiegel stated.

Snap Inc. also credited part of its success to its Snapchat+ subscription model, which saw 131% YoY growth in 2024. The service ended the year with an annualised revenue run rate well over $500 million.

Augmented Reality (AR) engagement also helped in driving user activity. In Q4 alone, over 400 million Snapchatters engaged with new Gen AI Lenses more than 4 billion times, reiterating the company’s increasing focus on AI-powered features.

Advertising & Creator Economy Expansion

Snap’s advertising segment also grew, with Sponsored Snaps and Promoted Places increasing ad reach by 30% on average in the U.S. The company also launched a unified monetisation program for creators, expanding revenue-sharing opportunities through Spotlight and Stories.

Again, Snapchat’s Snap Star program led to a 40% YoY increase in the number of creators posting content, showing the platform’s focus on supporting digital creators.

What’s Next?

With the sharp reduction in losses, improved cash flow, and strong advertiser momentum, Snap Inc. is striving to make 2025 even better. The company will discuss its Q1 2025 outlook in its upcoming earnings call.

The post Snapchat: $9M Profit Marks a Stunning Reversal from $248M Loss | 528% Surge in Free Cash Flow appeared first on Tech | Business | Economy.