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Home / Business / Snapchat revives growth in Q1 with 190M users – TechCrunch

Snapchat revives growth in Q1 with 190M users – TechCrunch



Snapchat seems to have turned the corner after a year of flat or negative user involvement thanks to a strong first quarter 2019 income statement. It reached 190 million daily active users, up 2 percent from $ 186 million in Q4 2018, when it was plateau, but still down from 191 million a year ago. Snap created so many users in Q1 that in the last five quarters, combined partly thanks to the newly reengineered Android app. Snap experienced $ 320 million in revenue and – $ 0.10 non-GAAP EPS, beating Zack's consensus estimates at $ 306 million and $ 0.12 EPS, with sales of 39 percent year-over-year.

One concern is Snapchat's guidance on major losses the next quarter, from $ 1

25 million to $ 150 million compared to the $ 123 million quarter. That's because increased usage triggers higher Amazon AWS and Google Cloud bills for the company. Since the rest of world users only earn an average of $ 0.97 against $ 2.81 for North American users, international growth can cost Snap money until it shows how to do more of ads there. "If the engagement trends continue in a positive direction, we expect to monitor higher infrastructure costs despite improving unit costs for the underlying shooting services and user actions," writes Finance Director Lara Sweet. This could delay Snapchat's profitable profitability, which Spiegel had set itself to reach by the end of 2019.

The strong effort on earnings led to Snap's share of climbing about 10 per cent in retrospect to around $ 13.11 after hours of trading, after closing at $ 11.99 earlier today. It's up from a low level of $ 5.07 in December. But the stock price fell back to being up 2 percent to $ 12.15 at 2:10 Pacific. It is probably due to the stock price more than doubling in recent months. Snap also contributed to a modest revenue growth of $ 335 million to $ 360 million in the second quarter.

Snap managed to add users in all its markets, raising 1 million in North America, 1 million in Europe and 2 million in developing countries where the Android app is critical. The 25 percent smaller, 20 percent faster Android app provided a 6 percent increase in Snaps shipped from low-end Android devices in the first week after upgrading.

One drawback of an otherwise vigorous earnings report was that average earnings per use fell in the third quarter $ 0.85 in Europe to $ 0.77. This may partly be due to usage increases that spread advertising revenue thinner over users. But it's a lucrative market where Snap must do better with advertisers. Snap experienced a net loss of $ 310 million in $ 320 million in revenue, meaning it is still deep in the hole and needs to deal with how much it goes to employee compensation and reinforced reality hardware R&D that can take a decade to distinguish. get out.

Snap repeated a state divided by its large Partner Summit conference this month, which now reaches 90% of all 13-24 year olds and 75% of all 13-34 years in the United States. claim that there are more 13-24 year olds in the US than Instagram. This state can get advertisers to give the Snapchat the time of day, even though it is the total number of users who are not over 1 billion monthly lists like Instagram thanks to their international appearance.

With Android fixed, a product that is still differentiated thanks to ephemeral messaging and Discover, and losses that come under control, Snapchat looks as though it may have ended the closing price after IPO. And now, finally, it has a coherent strategy to compete with Facebook's clones, which I detail in my part of the article "To stop copycats, Snapchat shares itself". Instead of taking the moral highway, the other apps colonize with their Stories platform and ad network to recruit allies to fight the Zuckerberg Empire.

Snap can never be a billion-user company. But if it can encourage teens who have adopted it as their messaging app entertained with media content while using their best-in-class ephemerality to attract downloads, it can survive for profit. Then it may begin to look forward again as it prepares to fight the chemical giants of the future for magnified reality goggles.

Come see Snap CEO Evan Spiegel talk at TechCrunch Disrupt SF on October 2-4. Get your tickets here.


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