Snap's India unit profit more than doubles to Rs 6.2 crore in FY22

(Image Courtesy: Snapchat)

Snapchat parent Snap Inc's India unit has more than doubled its profits and total revenue for the financial year 2021-22, as the social media firm grew its operations in the country that has emerged as a key user growth market in recent years.

The company reported a net profit of Rs 6.22 crore for the year, registering a 113.3 percent year-on-year (YoY) jump from 2.91 crore profit a year back, as per its filings with the Registrar of Companies.

Revenue from operations grew to Rs 65.78 crore for the financial year, posting a 101.1 percent YoY increase from Rs 32.7 crore in the previous financial year. Total revenue grew to Rs 65.88 crore for the financial year, a 101.4 percent YoY increase from Rs 32.7 crore in the previous financial year.

It's worth noting that these revenue numbers don't represent the sales revenues of the company, but rather the revenue generated from providing software technology and related services to the firm's affiliate entity Snap Group Limited.

The India entity is engaged in developing, designing, selling and marketing of the firm's communication software meant for video and voice communication as well as providing consulting and promotional services to the affiliate entity.

In terms of expenses, the social media company saw its employee benefit expense increase by 75 percent YoY to Rs 34.28 crore in FY22 from Rs 19.59 crore in FY21. This includes a 100 percent jump in salaries and bonuses to Rs 20.34 crore in FY22 from Rs 10.13 crore in FY21 and a 40 percent increase in employee stock compensation expense to Rs 11.97 crore in FY22.

Advertising, branding and promotion expenses also grew by 150.8 percent YoY to Rs 15.11 crore in FY22 from Rs 6.02 crore in FY21.

India a key growth market

India has emerged as a key growth market for Snap in recent years. The company had claimed to have over 100 million monthly active Snapchat users in the country, as of October 2021.

Snap CEO Evan Spiegel has previously said that they are making use of learnings from the company's expansion efforts in the country to drive community growth in new geographies.

"We have made a concerted effort over the past year to organise our team and make investments in our products to realise these monetisation and community growth opportunities," Spiegel said during the company's earnings conference call in February 2022.

In November 2022, Snap hired former Meta India Managing Director Ajit Mohan as its president for the Asia Pacific (APAC) region. He will now lead the company's business in India, Australia and New Zealand, China, Japan, Singapore, Malaysia, Indonesia and Korea markets.

This hire is part of Snap's recent realignment in its regional leadership wherein it created a new president role in Americas, EMEA and APAC regions.

It also comes against the backdrop of a broader restructuring at Snap as the company's revenue growth continues to be impacted by the sharp advertising slowdown due to the deteriorating economy and Apple's recent privacy changes in its iOS operating system.

This move resulted in the company laying off about 20 percent of its workforce and scrapping several projects such as Snap Originals, Minis, Games, and Pixy besides winding down standalone apps Zenly and Voisey.