Snap appears to be working its way out of a downturn. In the company’s Q2 earnings release that just dropped. Snap revealed that it had 203 million daily active Snapchat users in the last quarter, up eight percent year-over-year and seven percent quarter-over-quarter. That came after several quarters of declining users, something that was clearly troubling to investors.
Last quarter, it released an updated, optimized version of its Android app after years of Android users complaining about a lagged experience and poor quality. Given that most of the world’s population uses an Android device, the redesigned app clearly makes it appealing and functional for more people. CEO Evan Spiegel said in prepared remarks today that the change encouraged Snapchatters using the Android app to send 7 percent more snaps compared to the old version. Beyond the app release, however, the company is also taking other steps to ensure that people outside of English-speaking countries are welcomed on the app.
As for its financial performance, Snap still isn’t profitable — but it’s slowly inching closer to that day. The company pulled in $388 million in revenue, a big 48 percent increase over Q2 one year ago. But the company still lost $255 million in the quarter; that’s 28 percent less money than it lost in Q2 2018.
Somewhat surprisingly, Snap’s Discover platform is also getting more engagement than it has in the past. The audience of people watching content on Discover daily grew 35 percent in the last year though Snap didn’t provide any numbers to quantify how big (or small) that audience is. Total daily time spent watching Discover is also up to the tune of 60 percent year-over-year.
Apart from its global efforts, Snap had a bit of viral magic with the launch of a filter that made users appear like the opposite gender. It also made them look like babies, and celebrities like Kim Kardashian West shared the filter results on Instagram. Even still, people had to download or at least reopen Snapchat to try the filter, regardless of where they posted the results. Snap says it’s “cautiously optimistic” that the growth trend in user engagement will continue into the next year.
On the product side, this has been a quieter quarter for Snap. It made multiple big product announcements last quarter during its first partner summit in Los Angeles. At the event, Snap said that Snapchat Stories would come to Tinder and Houseparty, Snap ads will appear in other developers’ apps, it’s building a video game platform and a roster of original programs, and it developed new AR filters that make the Eiffel Tower puke rainbows.
