Click here to read the full article.
Snapchat parent Snap said Tuesday in reporting its second-quarter 2020 numbers that its daily active users jumped 17% to 239 million in Q2. Revenue also rose 17% to $454 million as net losses widened to $326 million for the three months ended in June, up from $255 million the prior year.
“We continued to grow our community and business in a challenging and uncertain environment,” said CEO Evan Spiegel. “I am proud of our team for innovating on new experiences for our community and driving value for our partners, demonstrating the importance of our service in people’s lives. We are grateful that the resilience of our business has allowed us to remain focused on our future growth and opportunity.”
More from Deadline
The stock plunged 11% in after-hours trading as numbers generally met or beat estimates but sales still showed a significant slowdown in growth. Shares pared losses a bit after the initial hit but are still down nearly 6%.
The mobile-only cross between a social network and messaging app blew away forecasts for the first quarter and has been a huge gainer in the market since then.
Snapchat is the smallest of the big five U.S. social media players but today is an important bellwether for key ad sales in the quarter — the first to be 100% mired in the COVID-19 pandemic. Snap is the first among the group to report earnings, with Twitter up later this week.
The company didn’t give many specific ad metrics in its earnings release but will likely do so on a conference call slated for 5 p.m. ET.
Snap may have benefited from a shift of some of Facebook’s direct response ad spending from advertisers that are pausing spend on Mark Zuckerberg’s social media giant.
Analyst John Blackledge of Cowen had expected daily active users of 239 million, up 17.7% year on year. He recently raised his price target, noting Snap’s potential for upside in advertising, e-commerce and AR.
In June, Snap announced new developer products and partnerships across the Snap Kit, Snap Games and Bitmoji ecosystems. It also introduced Snap Minis, a new way for developers to bring experiences inside Snapchat while leveraging the social power of the platform.
Snap has evolved various functionalities from one to many sharing via Stories, content offerings, chat including video and audio calls, and creative tools like lenses and Geofilters.
A second quarter survey by Cowen showed Snap users spending about 27 minutes a day on average on the service, flat sequentially and lower versus 35 minutes a year ago. That compared to 45 minutes daily for core Facebook users, 33 minutes for Instagram and 29 minutes for Twitter. TikTok, recently added to the survey, registered 41 minutes a day, up from 37 minutes in the first three months of the year.
Cowen noted the new and upcoming features showcased at Snap’s recent, second annual Partner Summit including a new Action (navigation) Bar, a commercial feature for Maps called Places, and the introduction of open-source ML integration capabilities for AR Lenses (SnapML).
“We came away increasingly convinced that Snap is the definitive leader in AR and can sustain robust product innovation,” said Blackledge in a recent report.
He also said the latest IAB survey of COVID-19 advertising suggests upside to Wall Street’s current second-half ad estimates. IAB found advertisers expected their digital ad spend to be up 13% year on year in the second half, compared with 15% growth in the second half of 2019, marking a near full recovery.
Best of Deadline
Sign up for Deadline’s Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.