The parent company of Snapchat and Bitmoji reported Q3 revenues of $679m, up 52pc from the same period last year and beating market expectations.
Snap shares have soared on the back of the company’s third-quarter earnings report. The Los Angeles-based company has had a bumpy year so far, with user numbers soaring at the onset of the Covid-19 pandemic but with growth petering out in Q2.
However, Snap beat expectations in Q3 to reach revenues of a $679m. This marked growth of 52pc compared to the same period last year. Daily active users clocked in at 249m, representing an 18pc increase from last year, and the number of ‘snaps’ sent every day on the platform also grew by 25pc.
Snap’s net loss for the quarter was $200m, compared to $227m in the same period last year. Shares at the company were up by nearly 20pc in after-hours trading yesterday (20 October) following the publishing of the results.
Snap was founded in 2011 and is now the parent company of Snapchat, Spectacles and Bitmoji. It currently has offices in 15 countries including the US, UK, China, Israel, Australia, Germany and more.
On Snap’s earnings call yesterday, CEO Evan Spiegel said 11m daily users had been added to the platform during the last quarter. “Our year-over-year growth rates for both daily active users and revenue were higher this quarter than they were in Q3 of the prior year. In fact, they represent our highest Q3 growth rates since 2017.”
He claimed that the platform continues to reach more than 90pc of the Gen Z population and 75pc of the Gen Z and millennial population in countries such as the US, the UK and France.
Spiegel highlighted the popularity of Snapchat’s Lens Studio, which offers users augmented reality features. “Some of these Lenses are used by Snapchatters across the world, while others are notable for their extraordinary regional engagement. For example, a university student in India created a lens with a smoke-flare effect which went viral in India and south-east Asia, garnering billions of views on Snapchat and even more on other social platforms.”
However, the company had to apologise earlier this year for a Juneteenth-inspired lens that asked users to “smile and break the chains”. It was criticised for its portrayal of slavery and missing the mark of the seriousness of systemic racism.
Looking ahead, Spiegel said Snap will “continue to grow in new markets, broaden [its] product offerings and improve [its] underlying infrastructure”.
Currently on the horizon are a new messaging element, a five-tab navigation bar, further investments in augmented reality to improve the Lens Studio, better content for Snap’s Discover feature, more opportunities for monetisation and increased focus on gamification.