$SNAP - The SnapBack
Snapchat owner Snap Inc. (+10.45% after hours) reported its strongest three months as a public company yesterday, with its daily user base growing 7%from the previous quarter to 203 million. Q2 revenue also increased 48% annually, beating expectations.
Zoom out: Snap’s 2017 and 2018 were about as bad as it gets for a disappearing photo sharing platform. The company suffered from shrinking downloads, a botched redesign, and competition from Facebook’s three-headed monster—Instagram Stories, Facebook Stories, and WhatsApp Status.
But it looks like Snap’s beating that monster back. Its weapon? Teens.
How Snap learned to stop worrying and love Gen Z
For a brief moment in 2017, CEO Evan Spiegel said the company wasn’t doing enough to get moms and dads snapping. But now, attracting Gen Z has come back into focus:
- Snap said earlier this month that it reaches 90% of 13-to 24-year-olds in the U.S.
Speaking of ads, Snap also improved its ad tech with features enabling partners to better track their campaigns.
- SimilarWeb, an analytics firm, said global visits to Snap’s advertising platform increased by 23.9% over the last year.
Finally...have you seen those filters?
Snapchat’s rolled out a whole bunch of new features over the past few months:
- It’s augmented its augmented reality capabilities with a hugely popular gender face swap function, a baby face filter, and a GoTdragon on NYC’s Flatiron building.
- It launched Snap Games, an in-app social gaming platform, in April.
But it hasn’t completely recovered
Though Snap’s stock is up more than 180% since its December 2018 low, it still hasn’t reached its $17 IPO price from March 2017. And Snap keeps losing money ($255 million last quarter) as it spends on R&D for those whizbang AR features.
Bottom line: Snap can’t touch Facebook’s world-dominating scale, but its advanced tech and grip on the teen market could give it an edge.
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