Snapchat Thinks It Will Generate at Least $300 Million in Revenue This Year
Investors are buying into Snapchat’s massive $16 billion valuation because its business is growing significantly. Or at least expected to grow significantly in 2016.
Snapchat is targeting between $300 million and $350 million in revenue in 2016, according to multiple sources familiar with the company’s plans. That’s six or seven times the $50 million in revenue Snapchat projected last year.
Snapchat’s business is still new and evolving, and advertiser interest is still very experimental. Essentially that means it can be tough to predict incoming revenue with much accuracy, as most advertisers don’t have Snapchat as a staple of their advertising plans.
The company hit a $100 million revenue run rate in Q4, according to one source. Advertising is cyclical, and Q4 is usually a strong advertising quarter, but it’s worth noting because the run rate metric gives us a glimpse at how the business is growing.
Still, boosting projected revenue like that must mean the businesses is growing at a nice clip. We don’t know if the $16 billion valuation is pegged to this year’s expected revenue, but if it were, that would amount to more than 50 times this year’s sales. Facebook, by comparison, trades at a value of about 17 times its annual revenue.
A Snapchat spokesperson declined to comment....MORE