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Snapchat Adds 9 Million More Daily Active Users in Q2

… Reports 17% Increase in Revenue

Snapchat has reported its Q2 2020 performance update, showing increases in both users are revenue, and, in general, positive signs for the ongoing steady growth of the platform.

First off, on users, Snapchat added 9 million new daily active users for the quarter and is now up to 238 million DAU.

Snapchat is seeing the most growth in the ‘Rest of the World’ category, adding only 2 million and 1 million new users respectively in the US and European markets.

Much of that growth, says Snap CEO Evan Spiegel, can be attributed to improvements in how Snapchat runs on different devices.

“We are continuing to invest in-app performance and localization to make our service more accessible to people all over the world, with Snapchat now available to over two billion people in their native language. These efforts have helped us grow even faster in emerging markets like India, where we’ve seen over 100 percent growth in daily active users over the past year.”

India, which is now the second-biggest smartphone market in the world (behind China), is dominated by Android devices, which Snap, for a long time, had largely ignored. In 2018, Spiegel publicly acknowledged the issues with running Snapchat on Android, which many had suggested had impeded the app’s growth (and that Spiegel had ignored), and Snapchat launched a revamped Android app in 2019. Since then, adoption among regions like India has pushed the Snap’s growth higher – this time around, beating analyst expectations.

But still, users in developing markets are not as lucrative as those in other regions.

The variable scales used in these graphs somewhat hides the fact that users in the ‘Rest of the World’ sector produced significantly less ARPU this quarter – down to almost a quarter of what North American users now generate.

Still, more users provide more opportunity, and Snapchat’s revenue has grown 17%, YoY, bringing in $454 million for the quarter.

Given the current conditions, that seems like a solid result, but investors had been hoping for better numbers, and shares in Snap fell more than 6% in after-hours trading.

In his accompanying statements, Spiegel said that Snap is doing well, despite difficult market conditions.

“While our revenue growth rate continues to be impacted by ongoing market disruptions, the fundamentals of our business are strong, and the high levels of engagement on our service are backed by years of investment in our self-serve advertising platform, which is helping our partners achieve success and grow their businesses in this uncertain environment.”

Spiegel also noted that its seeing increased usage of its AR tools, with user time spent engaging with Lenses growing 37% year-over-year.

Interestingly, a big chunk of that engagement is coming from the community created AR experiences.

“Today Snapchatters play with Lenses created by our community six times as often as they did just last year, and these Lenses now drive more than a quarter of all Lens engagement on Snapchat.”

Snapchat has been working to better facilitate its AR creator community, with the addition of Creator Profiles last April, and improved discovery options to help creators maximize their on-platform presence. That approach has now also extended to brands, with Snapchat adding dedicated brand profiles earlier this month.

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