Jul 19, 2022
Titan's Takeaway: As investors continue to favor companies generating cash flow today vs. those still growing unprofitably, we believe the launch of Snap's subscription offering feels well-timed. Recurring revenue helps expand a company's multiple and Snap is tactically launching this feature to secure stable future cash flow.
Grace, from your Investor Relations team, discusses the new Snap feature.
Snap announced on Monday that it would be bringing its mobile-first application to your desktop, paving the way for users to snap and chat on their computers as well as their phones.
Snapchat for Web, initially only available to Snapchat+ subscribers, is the first feature to be rolled out since the company introduced their paid tier in late June.
Currently, Snap has an estimated 330 million users, with over 100 million people using the chat and call features every month.
Launching a desktop offering may help Snap compete with the likes of Discord, a social messaging platform built for users to chat within specific online communities such as gaming or online school.
And to the older audience, we’ll say that if you’ve ever felt nostalgic for the good old days of AOL instant messenger, the rollout of Snap’s web platform and its unique chat capabilities may scratch that itch.
The company hasn’t yet revealed the initial traction of Snapchat+, but driving users to use the application across various devices will be an important driver of subscription growth, in our eyes.
In a market saturated with competition, it’s not surprising that Snap is looking to up their game. Instagram, Facebook, Twitter, and TikTok are all available interchangeably on web and mobile, and have also begun the early work on their own subscription offerings – primarily on the creator side.
Most social media companies have had a tough go in 2022, but SNAP is down more than 70% year-to-date. As investors continue to favor companies generating cash flow today vs. those still growing unprofitably, we believe the launch of Snap's subscription offering feels well-timed.
It’s an interesting time for social media companies. As both users and investors, we’ve watched these startups grow from ad-free, experimental social networking apps to now ad-supported, potentially, subscription based, conglomerates. We’ll see how it goes.
Cash Management
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