Latest redesign of Snapchat app appears to be bringing users and advertisers back into the fold
Snap Inc. SNAP 3.99% reported rising daily users and accelerated revenue growth on Tuesday, signs that a tumultuous redesign of the company’s core app last year and its strong following among young people are translating into business gains.
The Santa Monica, Calif.-based company said daily users increased 2% to 190 million, from 186 million the previous quarter, after three consecutive quarters of stagnation. Analysts polled by FactSet had expected the number of users to inch up less significantly, to 187 million.
Snap’s core of users in the U.S. is particularly strong: Snap now reaches 90% of 13- to 24-year-olds in the U.S., the company said.
Evan Spiegel, Snap’s chief executive, said that the company’s ads now reach more people in that demographic than those of its rival, Instagram.
Snap’s move last year to separate the messages and content from outside parties on its Snapchat app rankled users. This year’s redesign of the redesign, coupled with a less glitchy version of the company’s Android app popular in developing markets, appeared to bring users and advertisers back to the fold.
“We are excited to see the early results of some of the investments we made in 2018 and prior years,” Mr. Spiegel said.
Snap’s revenue rose 39% to $320.4 million in the first quarter, from $230.7 million a year earlier. Those results exceeded analyst projections of $306 million, according to FactSet.
Increased engagement also helped Snap make more revenue per user in North America, where Snap’s average revenue per user increased 34% to $2.81, from $2.10 a year ago.
The company’s loss in the first quarter shrank to $310 million, from $385.8 million, a year earlier. That missed analyst expectations of $288 million, according to FactSet. Snap, which went public in 2017, has yet to report a profit as a publicly traded company, although Mr. Spiegel has said it is his “stretch” goal for the company to be profitable in 2019.