Snap's Q4 2024: Contradictory Insights on Simple Snap, AI Costs, and Advertising Strategies

These are the key contradictions discussed in Snap's latest 2024Q4 earnings call, specifically including: Simple Snap rollout and monetization impacts, AI cost curve expectations, Direct Response (DR) Advertising Performance and Growth, and Brand Advertising Performance and Strategy:



Revenue and User Growth:
- Snap Inc. reported revenue of $1.56 billion for Q4 2024, an increase of 14% year-over-year, reaching 453 million daily active users.
- The growth was driven by improvements in direct-response advertising, the expansion of Snapchat+ subscribers, and enhancements in the augmented reality ecosystem.

Direct-Response Advertising and DR Ad Products:
- Direct-response (DR) advertising revenue increased 14% year-over-year, with notable growth from Pixel Purchase and App Purchase Optimizations.
- This was attributed to stronger performance and better utilization of privacy-safe signals, and improved ad formats improving results for advertisers.

Snapchat+ and Subscription Revenue:
- Snapchat+ subscribers grew from 7 million to 14 million in 2024, with other revenue more than doubling to $143 million in Q4.
- The growth was driven by the adoption of personalized features and increased engagement from subscribers.

Infrastructure and AI Investments:
- Infrastructure costs per DAU were $0.84 in Q4, reflecting significant investments in machine learning and AI advancements.
- These investments are aimed at improving ad performance and the user experience, with a focus on larger and fresher ML models.