Snap adds more users amid coronavirus lockdown
As in other social networks, Snap saw an increase in usage during the pandemic.
Angela Lang / CNET
In the first three months of 2020, the number of users of Snapchat increased as more and more people turned to the short-lived messaging app to stay in touch with their closest friends and family members.
Snap, the app’s parent company, announced on Tuesday that the app had 229 million active users a day in the first quarter, up 20 percent over the same period last year. Snapchat had 218 million users in the fourth quarter.
Like other social networks like Facebook, Snap has seen an increase in usage during the coronavirus pandemic. In early April, Snap said the snapshots sent between friends and group chats had reached an all-time high. The company said on Tuesday that communication with friends increased more than 30% in the last week of March compared to the last week in January. The average time spent on the app increased more than 20% over the same period, with growth rates higher in France and the UK.
Snapchat users also use more voice and video calls. The company said the number of calls increased more than 50% from late February to late March. It was also noticed that users spend more time watching shows, playing games and using augmented reality effects in the app. Last week Snap launched a resource hub to help businesses.
“Snapchat helps people stay close to their friends and family while they are physically separated. I am proud of our team who have mastered the many challenges of working from home during this time as we continue our business expand and assist those affected by COVID-19, “said Evan Spiegel, CEO of Snap, in a statement. COVID-19 is the respiratory disease caused by the coronavirus.
Debra Aho Williamson, an analyst for eMarketer, said in a statement that user growth was expected due to shelter-at-home orders. Snap’s ad sales were higher than analysts expected. Snap reported sales of $ 462 million, exceeding Wall Street estimates of $ 428.80 million.
“If advertisers had cut Snapchat advertising budgets, they might not have done so in large numbers before the end of the quarter,” she said. “I think the second quarter will be a much more important quarter.”
Spiegel said during a conversation with analysts that the company had high sales growth rates in the first two months of the quarter, although advertisers weren’t spending as much due to the outbreak of the coronavirus, which offset the lower growth rate in March.
The company lost 21 cents per share, falling short of expectations of a loss of 20 cents per share. Excluding certain expenses, such as share-based payments, Snap lost 8 cents per share in the first quarter, slightly worse than the 7 cents per share loss surveyed by Thomson Reuters.
The company’s stock rose 20% in after-hours trading to $ 14.93 per share.
Snap’s chief financial officer, Derek Andersen, said the company was “cautiously optimistic” about its future advertising business, even though it had weathered the effects of the coronavirus outbreak.
A lot depends on how the world and governments will deal with the corona virus in the future, he said.
“I would also like to point out that there is a lot that we do not know, which is why, in my opinion, it is difficult to predict with certainty exactly what the trends will be in the future,” said Andersen.
