Snapchat Files for IPO After Huge Revenue Numbers in 2016

Snapchat’s parent company, Snap Inc., formally filed to go public on Thursday, offering the first official look at how the mobile app’s ad business is doing.

Last year, Snap Inc. made $404.5 million, up from $58.7 million in 2015. The large jump has a lot to do with the fact that Snap Inc.’s business, which centers around Snapchat, is still very young.

Snapchat opened its advertising business in October 2014, and that business accounted for 96 percent of its parent company’s total revenue last year. Snap Inc. also made money from sales of its video-recording sunglasses, Spectacles, but said that Spectacles “has not generated signficant revenue.”

Of the revenue that Snap Inc. generated in 2016, $365.0 million was generated directly by the company, and $34.9 million came from partners, like publishers who sell ads to run in their channels within Snapchat’s Discover section and share the revenue with Snap Inc. In 2016, the company paid out $57.8 million to content partners, such as Discover publishers, up from $9.6 million in 2015.

Snap Inc.’s revenue has grown at a much steeper rate than its flagship app’s daily user base. By the end of 2016, Snapchat’s revenue had grown by 589 percent, while the five-year-old app’s daily user base had grown by 48 percent year over year to total 158 million people.

Source: Marketingland.com