Snapchat is a multimedia messaging app owned by Snap Inc. The app has seen its fair share of challenges in recent years — including a Federal Trade Commission charge that Snapchat misled users about its noted feature that photos and videos disappear “forever” once sent — but it is still one of the most popular social media apps among young people, averaging almost 320 million daily users who spend an average of more than 30 minutes per day on the app.
Review the figures below to learn more about the company’s market value and find out if it’s a smart investment for you.
|Headquarters||Santa Monica, California|
|CEO Evan Spiegel 2021 Compensation||$1 base salary, $2,094,432 total compensation|
|Share Price, 52-Week Range||$24.32 – $83.34|
|2021 Revenue||$4.12 billion|
|2021 Profit||-$487.96 million|
|GOBankingRates’ Evaluation of Snapchat’s Net Worth||$1.07 billion|
Snapchat’s Market Cap: $55.24B
When investors want to know the size of the company, they look at market capitalization, or the total dollar worth of the company’s stock. To find this number, they multiply the number of outstanding shares by the current market price of one share. Snapchat’s market cap stands at $55.24 billion.
Market cap is just one figure investors use to get a general idea of how Snapchat stock should be priced. The fact that the company has been losing money on an annual basis for the last four years might be of concern.
Snapchat’s Net Worth: $1.07B
Although market cap gives you a sense of what the market values a company at, the number can be based on hundreds of factors, big and small, that boil down to market volatility. The GOBankingRates Evaluation of a company’s net worth, however, considers figures like assets and revenue, using a company’s income statements and balance sheets for the last three fiscal years to draw a conclusion of its value.
Based on Snapchat’s revenue and profits from the last three years as well as its assets and liabilities, Snapchat has a valuation of $1.07 billion.
Snap Faces User Experience Challenges
Snap Inc. went public in March 2017, raising $3.4 billion for its initial public offering. Its main products are cameras, most notably the one featured on its messaging app, and Spectacles, which manufactures eyewear that doubles as cameras. The company also generates revenue through Snapchat and augmented reality advertising.
Although the company got off to a strong start with its IPO, its ability to generate profit has been less than reliable. The company has been losing money for years due to operating costs, legal expenses and lackluster user growth.
As far as market forces go, Snapchat’s user experience has, in the past, incurred the wrath of celebrities like Rihanna and Kylie Jenner. Jenner’s Snapchat diss in February 2018, for example, led to the loss of $1 billion in market value for Snap Inc.
More recently, Snapchat, like other social apps, including TikTok, has been under pressure to take more proactive steps to stem the use of its platform for illicit drug sales and to protect minor users against exploitation by adult predators. In response, Snapchat announced in October 2021 that it would roll out new “family center” features, yet to be named, designed to “give parents more visibility into who their teenage users may be talking to on Snapchat and their privacy settings, among other things,” TechCrunch reported.
Snapchat said last year that it reaches 75% of millennials and Gen Z. It’s also the most popular social network among teens, with 35% using Snapchat compared to 30% using TikTok and 22% using Instagram as of October 2021, according to Statista. Snapchat saw a 20% increase in active daily users in 2021.
Snapchat Has Its First Profitable Quarter in 2021
Snapchat experienced some ups and downs last year, due in part to changes Apple made to mobile user privacy settings, which disrupted mobile advertising when the changes rolled out with an iOS update. However, the company ended the year on a positive note, with earnings, revenue and user growth beating analyst estimates, CNBC reported. The fourth quarter also was Snapchat’s first profitable one, on a net income basis, since going public.
Last year was important for Snapchat in terms of its content, products and partnerships as well. The platform’s Discover feed now streams content from creators like NBCUniversal, ViacomCBS, Disney and Universal Music in addition to original programming. The company has also expanded its mapping tools, Sounds, Lenses and AR experiences. In addition, Snapchat expanded offerings for advertisers, enabling measurement solutions, rolling out multi-format ad delivery and launching Shopping Lenses and a try-on interface for AR e-commerce.
Snapchat in 2022
Snapchat released its first-quarter 2022 earnings on April 21. Although revenue increased 38% year over year, net losses grew 25%. The company fell short of analysts’ expectations on both measures. However, daily average users grew by 52 million, an 18% increase compared to the same quarter last year, and user engagement was up significantly as well.
According to the release, Snapchat anticipates year-over-year revenue growth of 20% to 25% for the second quarter of 2022 — what it calls a conservative forecast that acknowledges ongoing challenges to its advertising business. In addition, it predicts an adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, of between break-even and $50 million.
Snapchat CEO Evan Spiegel received $2,094,432 in total compensation in 2021. Like other tech execs, he receives a salary of just $1 a year. The remainder is paid as other forms of compensation, such as pension — but not equity.
Despite Snapchat’s ups and downs, Spiegel’s net worth has grown from $4 billion to $6.1 billion in the last five years, according to Forbes estimates.
Daria Uhlig contributed to the reporting for this article.
Methodology: The GOBankingRates Evaluation assesses a company’s net worth based on the company’s total assets, total liabilities, and revenue and net income from the last three years. Base value is established by subtracting total liabilities from total assets from the company’s last full fiscal year. Income value is established by taking the average of the revenue from the last three full fiscal years, plus 10 times the average of the net profits from the last three full fiscal years, and then calculating the average of those two figures. The final GOBankingRates Evaluation number is the sum of the base value and the income value.
This article has been updated with additional reporting since its original publication. Data is accurate as of April 22, 2022, and subject to change.