Snap chief executive Evan Spiegel said easing coronavirus lockdowns will boost engagement on its platform as users increasingly coordinate socialization, as the company shows exceptional results at the first trimester.
Sales of Snap, the parent of the Snapchat messaging app, rose 66% year-on-year to $ 770 million in the first quarter of last year, beating analysts’ expectations of $ 742 million, a he said Thursday. Daily active users reached 280 million, up 22%.
“We’re optimistic about the engagement trends we’re seeing as the world begins to open up,” Spiegel said, adding that as restrictions eased in the United States in February, the company saw “inflection points” with users posting a short “Stories” video clip about their lives and using its Snap Map feature to share their whereabouts and activities.
“More recently, we saw an increase in the rate of new friendships and two-way communication on Snapchat at the end of March as people started to socialize in larger groups,” he added.
The optimistic result set benefited from delays in privacy changes to Apple’s iOS 14 operating system, which will prohibit app developers from collecting data on iPhone users without their explicit consent in a bombshell update that should be painful for the online advertising industry.
The changes were supposed to go into effect towards the end of last year, but will now arrive next week. Snap, which explored frowned upon ways to get around the rules according to a Financial Times report, said it was “not yet clear” what the long-term impact of the changes would be.
The company has guided year-over-year revenue growth of between 80% and 85% in the second quarter of the year despite the changes – albeit coming from a lower base after the pandemic weighed on them. Snap’s advertising customers in the second quarter of 2020..
After a troubled 2019, Snap embarked on a successful turnaround, investments in product upgrades and offering to advertisers bearing fruit. In March, Spiegel told a conference that the company’s previous multi-year forecast of at least 50% revenue growth was an achievable baseline even with further user growth or commitment.