Snapchat has earned just $ 3.1 million
The other day, Snapchat released its financial statement and the figures in it did not surprise anybody.
No wonder that Snapchat with the evaluation of approximately $20 M is making almost no profit. Lots of startups make losses for years and some go public well before they become profitable.
The company’s financial statement says that last year Snapchat lost $128 M and made only $3 M. In the year before last its profit equaled $0 M.
What is Snapchat spending money on?
The new financial report shows that the largest item of expenses, without considering the payroll, took $47 M. They were spent on the product and $13 M were spent on “outside services”. Snapchat spends almost nothing on marketing (less than $1 M). Before October 2014, Snapchat did not bother to monetize at all, so the $3 M are already a good figure. Snapchat’s Discover section, where advertisers spend a lot of money, was launched only in 2015, so the results of its work were not included in the 2014 finances.
It would be wrong to say that the accounting period went easy for Snapchat. The company has a big turnover of employees, even top range executives left, including COO Emily White, who had held a key executive position in Instagram before that.
Many times Snapchat received complaints from advertisers for too high prices for accessing the quite young teen audience. Then Snapchat changed its strategy and began to do better.
Curiously enough, despite this, Snapchat is good at managing its current bank account. According to the documents, the company has over $320 M in cash. It would be very interesting to find out what the company plans to spend this money on.