Snap results crack and pop
Buoyed by people looking at their mobiles more during the coronavirus pandemic, Snap reported results that surpassed analysts' predictions, both in revenue and daily active users.
In the three months ending March 31, Snapchat's owner saw the messaging app's daily active users soar 22% from a year before, to 280 million.
This is the biggest year-on-year jump in Snap's users in over three years, since 2017.
Its sales jumped even more, by 66% to $770 million. Analysts had predicted a mere $744 million.
Best of Snap!
The app's number of users on Android for the first time exceeded its users on iOS. This was a "critical milestone that reflects the long-term value of the investment we made to rebuild our Android application" its CEO Evan Spiegel said.
Snap initially launched on iOS in 2011, and its Android app languished when it appeared the next year. An updated Android app appeared in 2019, though, and has bolstered the app's footprint globally.
This revamped Android version, together with strong investment in language support and localization for geographies like India, where it now has over 60 million users, made Snap's growth biggest outside the US.
Mexico and Brazil were also among Snap's priorities, and it now has a footprint in 14 countries.
Gaining users is a snap
Snap's Santa Monica-based owners are also learning from their rivals.
A TikTok-like "Spotlight" option, offering up to $1 million per day for the most engaging short video clips, drew 125 million users in March.
Snap is taking a slightly different approach. Users who choose to post videos to the Spotlight platform will have their profiles obscured, so contributors' previous fame will count for less.
The move will also allow people to contribute content without attracting attention they do not particularly want.
The app has also been plugging its augmented reality "Lenses," which saw 40% more users engaging than in the first quarter 2020.
It isn't all cat ears, to give them their due. For Earth Week, Snap Studios teamed up with Google's AR and VR teams to come up with lenses supporting sustainability themes like reforestation and ocean conservation.
There was also a partnership with a fitness company, Sweat, to launch a full body lens to track body movements while exercising, to give recommendations on how to improve technique.
Other partnerships include Gucci and American Eagle, and newspaper publisher Gannett. It's a subtle hint that the company has big-time corporate advertising spend in its sights.
But still not turning a profit...
Still, tech companies' books are strange things. All this said, Snap made a net loss of $287 million.
Granted, this was an improvement on $306 million in the first quarter of 2020.
And the company is quick to point out it is investing heavily in growing capabilities, as well as focusing on big corporation advertising aimed at their hordes of devoted users in their teens and twenties.
This could be why, even though COVID-19 has flattered earnings for the past few quarters, Spiegel predicts an 80% revenue jump in the Q2.
Sure, users used Snapchat while they were stuck at home, Spiegel says. But wait until they start coordinating social activities again, and using the app for that.
But this doesn't address another cat stalking among the pigeons – the effect on the app of privacy changes in Apple's iOS14, just now hitting iPhones.
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- Japan's messaging Battle Royale pits telco RCS against Line
- Verizon, AT&T, T-Mobile kill RCS plans
— Pádraig Belton, contributing editor special to Light Reading