The instant messaging application "Snapchat" has announced a milestone it has awaited for a full five years. In an official statement, "Snapchat" revealed that for the first time since the company went public five years ago, it managed to achieve profits, recording a net profit of 23 million U.S. dollars in the fourth quarter of 2021.
While the net profit is considerably small compared to "Snapchat's" revenues, which reached 4.1 billion dollars in the fourth quarter of 2021, it represents an important step for a company that had been struggling with user growth without making a profit for many years. The number of daily active users rose to 319 million, an increase of 13 million for the second consecutive quarter, and a 20% increase during the year 2021.
This news led to a nearly 50% rise in "Snapchat's" stock in global markets, potentially doubling those profits in the coming months. Derek Andersen, the CFO of "Snapchat," stated that the company's ability to achieve these profits was due to its handling of privacy changes from Apple that negatively affected its advertising business, through adopting a business approach focused on enhancing user privacy.
He added, "We are still at the beginning of the journey, and I believe more profits will come; because our products are designed differently based on user privacy, even regarding our advertising efforts." A significant boost to "Snapchat's" profits has come from its adoption of a new technology similar to its competitor "TikTok," called "Spotlight," which involves sharing short videos that closely resemble TikTok's videos and presentation style, attracting over 12,000 individuals from the global content creation industry.
