April 30, 2019

Snapchat Restarts User Growth with Android Revamp

Snap Inc’s original shows and rebuilt Android app helped the app’s users for the very first time in three quarters and with that being said, one of the top analyst revenue forecasts, that it wasn’t enough to push the application’s shares much higher after a sharp run-up this year.

Just last week, Snapchat stated that the number of daily active users rose to a whopping digit of 190 million in the first quarter from 186 million in the prior period, but on the other hand, it remained below the mark of 191 million which it had a year earlier.

Evidently, the investors and advertisers have kept an eye on this figure for a long time now. The company executives left the franchise in droves late last year after a widely panned redesign of Snapchat, and any uptick is a welcome sign that Snapchat has stemmed user losses.

Chief Executive Evan Spiegel has worked to make Snapchat’s business reach the skies while the company avoided privacy and other scandals plaguing bigger rivals like Facebook for instance.

“We see so many opportunities to increase our investments, and we will continue to manage our business for long-term growth,” Spiegel said during the earnings call with analysts quite lately.

The overall revenue of the company took a jump up to nearly 40 percent in the quarter from a year earlier as it was able to wring more ad revenue out of each user. But on the other hand, Snap did not give specific guidance on any future user growth and cautioned that user growth rates tend to be higher in the first quarter versus the second quarter.

As a matter of fact, the revenue growth was helped by newly introduced ad formats like unskippable commercials on its original shows, which are being housed on the Discover page. Excluding items which the company lost more than 10 percent of is share in the quarter, beating analyst estimates of losses over 12 cents per share.

Snapchat’s focus on privacy and communication between friends has really helped it avoid issues with misinformation and the spread of explicit or abusive content. Quite honestly, these were some issues which Facebook and YouTube faced back in the days.

If we talk about average revenue per user, then it has jumped 39 percent to $1.68 during the quarter from a year earlier. The company’s net loss narrowed to $310.4 million, or 23 cents per share, from $385.8 million, or 30 cents per share.

For the second quarter, Snap said it expects revenue of $335 million to $360 million, well with this kind of pace the target is quite achievable. Though, that compares with the average analyst estimate for revenue of $348.5 million, according to the IBES data from Refinitiv.

Earlier this month, whether you know about this or not but, Snap launched a gaming platform within its app featuring some of the original and third-party games such as Zynga’s Tiny Royale.