Snap Inc has surpassed Wall Street estimates regarding user growth and revenue, as the improved Android version of the popular messaging app Snapchat attracted more users, though growth has slowed in North America. According to the report, the number of daily active users (DAUs), a metric closely monitored by investors and advertisers, increased by 22% year-over-year to 280 million in the first quarter, exceeding analysts' expectations of 275.3 million per Refinitiv's IBES data.
Most of the user growth came from outside North America, with a 57% increase from the previous quarter. Snap has been working on rebuilding the Android app, which suffered from technical issues, since 2018. The company stated that its Snapchat user base on Android has now surpassed that on Apple iOS for the first time, as more people download the new app outside the United States, where Android devices dominate over iPhones. Snap has added support for more languages and increased media content targeted at audiences in specific countries.
Revenue, primarily generated from advertising, grew by 66% to reach $770 million for the quarter ending March 31, exceeding Wall Street estimates of $743 million. Snap has increasingly invested in augmented reality technology, betting that it can help brands market products such as clothing and makeup to tech-savvy young users.
In March, Snap acquired Fit Analytics, a technology company that assists customers in determining the fitting of clothes. Snap's CEO, Evan Spiegel, stated in prepared remarks prior to the earnings call with analysts, "Augmented reality remains one of our biggest opportunities as we look to the future." Meanwhile, Snap's net loss shrank to $286.9 million, or 19 cents per share, down from $305.9 million, or 21 cents per share, a year ago. The company expects that in the second quarter, daily active users will grow by 22% to 290 million, with revenue ranging between $820 million and $840 million.
