Snapchat is growing faster than it has in years

Just a few years ago, there were concerns that Snap, the parent company of Snapchat, would not survive as a stand-alone business. Its stock price hit a low of around $ 5 after a disastrous overhaul that slowed user growth and puzzled advertisers.

The situation is very different now. Snapchat is growing faster than it has since 2017, the year it went public. On Thursday, the camera-based messaging app said it added 13 million daily users in the second quarter, an increase of 23% from the previous year. That means 293 million people use Snapchat every day globally, up from 173 million this time four years ago. (Twitter reported 206 million daily users in the second quarter, by comparison.) Snap’s revenue also climbed 116% to $ 982 million, making it a faster growing company than Twitter or Facebook.

The new numbers reinforce one of tech’s most impressive turnaround stories. They also reflect how tech companies have benefited throughout the pandemic as people spend more and more time online. Snap CEO Evan Spiegel said he expects the app’s user base to grow faster after pandemic lockdowns end, because Snapchat is designed to be used with friends.

Most of Snap’s second-quarter user growth came from outside of its core markets in North America and Europe, where advertisers pay more to reach people. This means that Snap has a lot of work to do to effectively monetize its new users. This quarter’s results also benefited from a delayed rollout of Apple’s data tracking changes in iOS 14, prompting third-party developers to display a prompt asking for permission to track users across different apps.

Snap and other ad-focused companies use this tracking to target ads at a lower cost, and some worry that users saying no to the prompt will make it harder to tailor ads to people’s interests. In prepared remarks to investors, Snap’s chief commercial officer Jeremi Gorman said, “We have seen higher enrollment rates than we typically see reported across the industry, which we believe is due in part to the trust our community has in our products and our business. ”This indicates that Snap may be more successful than some of its peers, namely Facebook, in navigating Apple’s changes.

What Snap and Facebook have in common is a passion for augmented reality, the technology that overlays infographics on the real world through phone screens or smart glasses. Spiegel has been touting Snap’s investments in AR for years, and more recently the company has taken steps to create shopping features that could potentially allow anyone to scan a product with the Snapchat camera, to experience it virtually. and buy it without leaving the app.

Snap recently released new Spectacles glasses with AR screens, although they are only available to certain AR creators. “Over 200 million Snapchatters engage with AR every day on average, and over 200,000 creators use Lens Studio to create AR lenses for our community,” Spiegel said in his remarks to investors Thursday.