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SENSOR TOWER · SEEMA SHAH · OCTOBER 2023
Social Media Scoop: Meta Platforms and Snap Q3 2023 Earnings Recap
Both Meta and Snap exceeded street estimates in their 3Q23 EPS and revenue, benefiting from a rebound in advertising demand. Both Meta and Snap's reported user metrics (DAUs and MAUs) moved inline with Sensor Tower data. Reels drove engagement for Meta, with Instagram's total hours engaged growing nearly 2x compared to its peers. Short-form video ad volume in the US has surpassed legacy features like Stories and Player, but it still falls short of Feed volume.
Key Takeaways:
SNAP shares soared ~15% after the company’s reported 3Q23 EPS and revenue exceeded street estimates as it saw some positive momentum in its ad business from large partners. Snap also posted double-digit user growth in the quarter: per ST data, global Snapchat mobile app DAUs increased 13% YoY (+3% QoQ), inline with Snap’s reported global DAUs (+12% YoY, +2% QoQ)
META’s 3Q23 EPS and revenue smashed street estimates, with the company reporting its most profitable quarter ever, registering both top and bottom line records. Reported revenue, operating margin, and net income YoY growth all accelerated vs 2Q23 as the company benefited from a rebound in advertiser demand and cost cuts. On the user growth front, ST data shows 3Q23 Facebook Blue DAUs (+2% YoY) and MAUs (+2% YoY) increased inline with the company’s reported DAUs (+5% YoY) and MAUs (+3% YoY)
Meta’s Facebook and Instagram continued to exhibit significant user engagement growth in 3Q23 (a key driver to ongoing advertising revenue growth), due to the continued popularity of Reels: Instagram total hours engaged grew a staggering 29% YoY in 3Q23, more than double that of competitors TikTok (+13% YoY) and Snapchat (+10% YoY) and sister app Facebook (+9% YoY). X was the sole social media app to exhibit a decline in YoY total hours engaged, down 8% YoY in 3Q23
Per Meta’s 3Q23 earnings call, CEO Mark Zuckerberg noted that “...Reels has now driven more than 40% increase in time spent on Instagram since launch” displaying the effectiveness of the feature in driving engagement. ST data corroborates this statement with 3Q23 total hours on Instagram up ~44% compared to 3Q20 (when Reels was launched)
Per ST data, Snapchat posted best-in-class user growth in 3Q23 with worldwide DAUs increasing 13% YoY, followed by Instagram (+10%), TikTok (+6%), and Facebook Blue (+2%). X (formerly Twitter), was the only social media platform to exhibit a significant decline in YoY DAU growth, falling 10% YoY in 3Q23
New ads by location data from ST’s proprietary device panel reveals that short-form video ad volume in the US (both Reels on Instagram and Shorts on YouTube) has outstripped volume on some legacy features like Stories (Insta) and Player (YouTube). The rising prominence of short-form video has prompted advertisers to add the medium into their media mix and shift their platform strategy to reach the most engaged audiences
For more information, request the full report from reports@sensortower.com.
