Shares climb as Snap Inc announces 48% increase in revenue to $388m
Snapchat announced an exceptionally strong second quarter on Tuesday, sending shares surging in after hours trading.
New augmented reality tools, a redesign of its Android application, and expansion into new markets brought the company major growth in the second quarter of 2019. The number of Snapchat users has increased 8% since this time last year to 203 million, the company said.
The growth in our community, engagement, and revenue is the result of several transitions we completed over the past 18 months, said the companys CEO, Evan Spiegel. We look forward to building on our momentum and making significant ongoing progress in each of these areas.
Revenue increased 48% in the second quarter compared with the same period in 2018, to$388m. The report comes after Snap predicted record earnings for quarter two in its first quarter earnings report in April. At the time, the company said it expected revenue to be between $335m and $360m, growing between 28% and 37% compared with the second quarter of 2018.
The company added 13 million users in the second quarter, well above a prediction from analysts of 2 million. The number of snap posts created each day increased to 3.5bn in the second quarter of 2019.
Snapchats viral selfie filters, including its gender swap feature, increased its user interaction in the second quarter. Spiegel said in a call with investors on Tuesday that 7 to 9 million of the 13 million additional users could be attributed to its new augmented reality lenses.
He also noted the user engagement with these tools could be translated into experiential advertising. More than 200 million people used the augmented reality feature within the first two weeks of its launch.
The company has been working to address government concerns about app safety and added new Android app features to increase its use. Spiegel said the ephemeral nature of Snapchat messages, which delete after sending, create a more intimate social media experience than what users find on other platforms.
The way we have constructed our service enhances user privacy and going forward that is something we will always keep in mind, he said.
The earnings represent a continued turnaround for Snapchat, which lost $1bn of its market value in 2018 after a controversial platform redesign, hitting a low of $4.99 per share on 21 December 2018. Snap Incs shares were up more than 12% in after hours trading following the report, near $16.60.
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