Source: Goldman Sachs, a lead bank for Snap's IPO, is predicting Snap will have revenue of $1.959B in 2018, up from $404M in 2016, and 221M DAUs, up from 158M
Rachael Levy / Business Insider :
Context & Ripple Effects
Days after Snap disclosed 161M December DAUs and $1.05 in Q4 2016 revenue per user, Goldman Sachs — one of the lead banks on Snap's IPO — is publishing 2018 targets of $1.959B in revenue and 221M daily active users. Because the projection comes from an underwriter with a stake in pricing the deal, it functions less as neutral research than as the growth narrative investors are being handed going into the offering.
First-order effects
- Snap now has hard public benchmarks set by its own lead banker: DAUs must climb from 158M to 221M and revenue must grow nearly fivefold from 2016's $404M within two years.
- Investors price the IPO against Goldman's curve rather than independent estimates, tying the stock's early valuation directly to the underwriter's assumptions.
Second-order effects
- When Snap's Q3 2017 revenue of $207.9M misses the $235.5M consensus with DAU growth slowing to 3% sequentially, every subsequent quarter becomes an audit of the IPO-window thesis rather than a fresh story.
- By Q3 2018, DAUs of 186M sit far below Goldman's 221M trajectory and the stock falls 15%+, forcing a re-rating of growth-stage social platforms on engagement quality instead of user-count expansion.
Third-order effects
- The pattern — lead-underwriter projections overshooting near-term results — strengthens the structural argument for separating IPO banking mandates from published research, since these targets operate as selling documents.
- In time the absolute numbers were surpassed anyway: by mid-2025 Snap reported 469M DAUs and $1.34B in a single quarter, meaning Goldman's forecast was directionally right but embedded a best-case timeline years ahead of reality.
The trend: Growth projections issued by IPO lead banks become the public yardstick new listings are judged against for years afterward, with actual performance typically arriving on a longer clock than the pitch implied.