SnapChat Parent Company Reports Q1 Results Revealing User and Revenue Growth

Snap Inc., the parent company of the popular social media app SnapChat, reported its first quarter financial results this week and revealed a revenue and user growth pop.

The company saw its daily active users grow by 11 million to 229 million during the quarter, representing a 20% jump over the same period last year and a 5% rise over last quarter.

Shares of Snap were soaring on Wednesday with a gain of over 22% compared to Tuesday’s closing levels.

For the quarter, Snap reported revenue of $462.5 million, compared to consensus estimates of $420.8 million compiled by Bloomberg. Adjusted loss per share at 8 cents was in line with the 8 cents expected. Daily active users came in at 229 million compared to 223.8 million expected. Average revenue per user was $2.02 compared to $1.87 expected.

Snap CEO Evan Spiegel said in prepared remarks that users over the age of 35 watching Snap’s Discover content doubled over last year in the first quarter.

“We believe that the recent acceleration in the adoption of communication technology and augmented reality during these travel restrictions will help support our longer-term trends in engagement growth,” Spiegel said.

Spiegel noted however that the company saw “lower growth in March” for advertising revenues, which partially offset increases in the first two months of the quarter.

In regards to the coronavirus, Spiegel said, “At Snap, our first priority is the health and safety of our community, our partners and our team. We closed our first office in January and continued to close offices as COVID-19 spread around the globe. Our team has rallied around maintaining business continuity during this critical time, and I am in awe of how quickly our team adapted to the circumstances and continued to execute against our ongoing opportunities. We are monitoring the current situation daily and are working toward a best case scenario for a rapid recovery, while also preparing for a worst case scenario.”

“Our team remains inspired and motivated despite the challenging circumstances because our product has never been more important in people’s lives, especially for helping close friends and families stay together emotionally while they are separated physically. We are seeing sustained communication volumes on our service that eclipse the peaks we see during major holidays. For example, communication with friends increased by over 30 percent in the last week of March compared to the last week of January, with more than a 50% increase in some of our larger markets. Snapchat has always been focused on helping people build and maintain their friendships, which is especially critical as people practice physical distancing and shelter in their homes.”

Disclaimer: We have no position in Snap Inc. (NYSE: SNAP) and have not been compensated for this article.