Snapchat (SNAP) reports its first quarter earnings for 2024.

Revenue for Snap’s first quarter increased 21% from $989 million in the same period last year. The company is growing at an accelerated clip, after it had previously reported six straight quarters of single-digit growth or sales declines.

During its quarterly call with investors, Snap finance chief Derek Andersen said the company also benefited from improvements across the greater operating environment.

Snap has been working to rebuild its advertising business after the digital ad market stumbled in 2022, and it’s starting to pay off. In its investor letter, Snap said revenue growth was primarily driven by improvements in the company’s advertising platform, as well as demand for its direct-response advertising solutions. Consequently, advertising revenue came in at $1.11 billion in the first quarter.

Adjusted EBITDA for the first quarter was $46 million, far surpassing the $68 million loss expected by analysts, according to StreetAccount. In its investor letter, Snap said adjusted EBITDA “exceeded our expectations” and was primarily driven by operating expense discipline, as well as accelerating revenue growth.

Despite the positive report, Snap’s growth still lagged behind Meta, which reported 27% growth in its first-quarter results earlier in the week. Meta shares faced a plunge after issuing a light forecast and discussing its long-term investments, creating unease among investors.

Snap reported 422 million daily active users (DAUs) in the first quarter, up 10% year over year. The company expects to report around 431 million DAUs in its second quarter, exceeding the 430 million expected by StreetAccount.

In terms of future outlook, Snap anticipates revenue between $1.23 billion and $1.26 billion for the second quarter, an increase from the $1.22 billion expected by analysts. Adjusted EBITDA is projected to range from $15 million to $45 million, compared to Wall Street’s expectations of $15.5 million.

Snap provided insights into its full-year 2024 cost structure, noting that quarterly infrastructure costs per DAU will fall between 83 cents and 85 cents for the remainder of the year. The company emphasized its commitment to evaluating infrastructure investments based on long-term business interests.

Snap mentioned a significant increase in user engagement with its content, particularly through Spotlight and Creator Stories. Time spent watching Spotlight, which curates user-generated content, rose by 125% year over year.

In a move to streamline operations, Snap announced a 10% reduction in its global workforce, affecting around 500 employees. Despite this, the company disclosed that headcount and personnel costs are expected to experience modest growth throughout the year.

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